Associated Enterprise

Recently, the Delhi bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of M/s Panasonic India Pvt Ltd Vs. Income Tax Officer (2010-TII-47-ITAT-DEL-TP), has upheld the aggregation of transactions where the Functions, Assets & Risks underlying those transactions are similar. The Tribunal also concluded that reimbursement of advertisement expenses received by a Distributor from its Associated Enterprise (AE) must be treated as operating income for co.. Full Article

Royalty paid by a taxpayer computed even on sales made to the Associated Enterprise is at arm’s length. Further, a taxpayer paying royalty to its Associated Enterprise can make additional payments for technical services rendered by personnel deputed by the Associated Enterprise. Full Article

One of the most challenging issues in TP is the taxation of income from intangible property. The issues may arise in several contexts, such as the appropriate royalty to be charged to a licensee of intangibles or the appropriate inter-company transfer price for goods manufactured and sold to a controlled distributor when the manufacturer owns the trademark for the finished goods in the distributor's jurisdiction. The OECD has also recently announced that it is considerin.. Full Article

The Finance Act, 2001 substituted section 92 with a new section and introduced new sections 92A to 92F in the Income-tax Act, relating to computation of income from an international transaction in order to facilitate the computation of reasonable, fair and equitable profits and tax in India in the case of businesses carried on by multinational companies. The transfer pricing provisions are in line with those stipulated by OECD. However there is a difference that the Indi.. Full Article