Transfer Pricing

Safe Harbour Rules – Recent Amendments

Income Tax - Section 92CB of the Income Tax Act 1961 provides that the determination of arm’s length price under Section 92C OR 92CA. However, same shall be subject to Safe Harbour Rules. Sections 10 TA to 10 TG deals with the Safe Harbour Rules, which pertain to International Transactions. Rule 10TE provides a detailed procedure for exercise [&hell...

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Thin capitalisation – impact on future debt raising

Income Tax - The taxation regime in India seems to be undergoing crucial changes to negate the above quote from one of the greatest philosophers of all times. On this backdrop, the principles of thin capitalisation as prescribed in the Organization for Economic Cooperation and Development (‘OECD’) Base Erosion and Profit Shifting (‘BEPS) Action ...

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POEM guidelines – more clarity or ambiguity?

Income Tax - The increase in globalization and technological advancement has resulted in the international expansion of several multinational and Indian corporations. Over the years, these corporations have used their global presence to enter low-tax jurisdictions, primarily to reduce the overall effective tax costs. ...

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POEM – Tracking the evolution of new Residency Norm

Income Tax - Place of Effective Management (PoEM) has been one of the most deliberated aspects under the Indian Income Tax regime since its introduction vide Finance Act, 2015, especially for Indian transnational groups....

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Computation of Interest Income Pursuant to Secondary Adjustments

Income Tax - Finance Act, 2017 inserted a new Section 92CE in the Income-tax Act, 1961 with effect from 1st day of April, 2018 to provide for secondary adjustment by attributing income to the excess money lying in the hands of the associated enterprise....

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Cabinet approves Measures to Prevent Base Erosion & Profit Shifting by India

Income Tax - Cabinet approves signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting by India...

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Guidance Note on Transfer Pricing Report U/s. 92E of Income Tax Act, 1961

Income Tax - ICAI has released the 5th Edition (November 2016) of the Guidance Note on Report Under Section 92E of the Income Tax Act, 1961 (Transfer Pricing). ...

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Indian businesses witness significant impact on tax planning from OECD BEPS tax plan

Income Tax - The results of a recently conducted global survey of 2,600 businesses in 36 countries, finds little impact from the OECD BEPS programme which was finalised last October, as 78 percent of the surveyed businesses said that they have not changed their businesses approach to taxation, despite more than 80 countries having agreed to adopt at l...

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Preamble to 2016 U.S. Model Income Tax Convention

Income Tax - On February 17, 2016, the Treasury Department released a revised 2016 U.S. Model Income Tax Convention (the 2016 Model), which is the baseline text the Treasury Department uses when it negotiates tax treaties. The U.S. Model Income Tax Convention was last updated in 2006 (the 2006 Model). This preamble highlights the significant features ...

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Transfer Pricing Rules to incorporate “range concept” and “use of multi-year data”

Income Tax - Notification of Transfer Pricing Rules to incorporate range concept and use of multi-year data to reduce litigation on transfer pricing issues....

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Company with extraordinary events cannot be considered as comparable

Cummins Turbo Technologies Ltd. Vs DCIT (ITAT Pune) - ITAT held that on account of extra ordinary events viz. acquisition of IQ group of companies and amalgamation of Accentia Infoserve Pvt. Ltd with Accentia Technologies Ltd, the said company cannot be considered as good comparable. ...

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HC confirms ITAT’s deletion of notional interest adjustment on delayed AE receivables

Pr. CIT -V Vs Kusum Health Care Pvt. Ltd. (Delhi High Court) - Transfer Pricing : Impact of delayed associated enterprise receivables subsumed in working capital adjustment made by the assessee company. Delhi High Court confirms ITAT’s deletion of notional interest adjustment on delayed AE-receivables....

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TP adjustment in absence of interest cost for delay in realisation of dues not sustainable

Evonik Degussa India (P.) Ltd. Vs. Deputy Commissioner of Income Tax (OSD) (ITAT Mumbai) - 1. Research and development services provider could not be compared to a company and Transfer pricing Adjustment are not sustainable. 2. A concern mainly engaged in sale of chemical compounds could not be considered as a right comparable with that of assessee rendering support services in connectio...

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ITAT on TP adjustment on account of Compensation for deemed brand development

Hyundai Motor India Limited Vs Deputy Commissioner of Income Tax LTU- II (ITAT Chennai) - The first question that we need to decide is whether the benefit accruing to the HMC Korea, as a result of increased brand value due to sale of Hyundai cars in India by the assessee company, constitutes an international transaction....

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TP: When Resale Price Method can be used with respect to related parties

Zee Entertainment Enterprises Ltd Vs The Addl Commissioner of Income Tax (ITAT Mumbai) - Transfer Pricing Officer has selected RPM as most appropriate method for determining the arm's length price of the transaction of sale of programmes and film rights to ATL in contrast to the TNM method selected by the assessee. The first controversy is as to whether the Transfer Pricing Officer was ...

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CBDT Amends Form No. 3CEFA related to Application for Opting for Safe Harbour

Notification No. 62/2017-Income Tax - (18/07/2017) - These rules may be called the Income-tax (21st Amendment) Rules, 2017.They shall come into force and shall be deemed to have come into force from the 1st day of April, 2017. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CEFA, in paragraph 2, under the heading Eligible International Tra...

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Draft Notification on foreign company resident in India U/s. 115JH

F No 370142/19/2017-TPL - (15/06/2017) - CBDT invites comments and suggestions on the Draft Notification in respect of foreign company said to be resident in India under Section 115JH of the Income-tax Act, 1961...

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Transfer Pricing- CBDT notifies tolerance limit for A.Y. 2018-19

Notification No. 50/2017-Income Tax - (09/06/2017) - Central Government hereby notifies that where the variation between the arm's length price determined under section 92C of the Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one per cent of the latter in respect...

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Govt. revises safe harbor scheme rules

Notification No. 46/2017-Income Tax - (07/06/2017) - The lukewarm response to the earlier safe habour scheme was on account of the high rates. Thus, taxpayers opted for unilateral APA process instead. The revised scheme has been designed to attract small to medium business, especially in IT/ITeS segment, so as to give them a viable alternative to APA...

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Notification on ALP determination in respect of wholesale trading

Notification No. 57/2016-Income Tax - (14/07/2016) - Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent of the latter in respect of wholes...

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Recent Posts in "Transfer Pricing"

Safe Harbour Rules – Recent Amendments

Section 92CB of the Income Tax Act 1961 provides that the determination of arm’s length price under Section 92C OR 92CA. However, same shall be subject to Safe Harbour Rules. Sections 10 TA to 10 TG deals with the Safe Harbour Rules, which pertain to International Transactions. Rule 10TE provides a detailed procedure for exercise [&hell...

Read More
Posted Under: Income Tax |

CBDT Amends Form No. 3CEFA related to Application for Opting for Safe Harbour

Notification No. 62/2017-Income Tax (18/07/2017)

These rules may be called the Income-tax (21st Amendment) Rules, 2017.They shall come into force and shall be deemed to have come into force from the 1st day of April, 2017. In the Income-tax Rules, 1962, in Appendix II, in Form No. 3CEFA, in paragraph 2, under the heading Eligible International Transaction...

Read More

Thin capitalisation – impact on future debt raising

The taxation regime in India seems to be undergoing crucial changes to negate the above quote from one of the greatest philosophers of all times. On this backdrop, the principles of thin capitalisation as prescribed in the Organization for Economic Cooperation and Development (‘OECD’) Base Erosion and Profit Shifting (‘BEPS) Action ...

Read More
Posted Under: Income Tax |

POEM guidelines – more clarity or ambiguity?

The increase in globalization and technological advancement has resulted in the international expansion of several multinational and Indian corporations. Over the years, these corporations have used their global presence to enter low-tax jurisdictions, primarily to reduce the overall effective tax costs. ...

Read More
Posted Under: Income Tax | ,

POEM – Tracking the evolution of new Residency Norm

Place of Effective Management (PoEM) has been one of the most deliberated aspects under the Indian Income Tax regime since its introduction vide Finance Act, 2015, especially for Indian transnational groups....

Read More
Posted Under: Income Tax |

Computation of Interest Income Pursuant to Secondary Adjustments

Finance Act, 2017 inserted a new Section 92CE in the Income-tax Act, 1961 with effect from 1st day of April, 2018 to provide for secondary adjustment by attributing income to the excess money lying in the hands of the associated enterprise....

Read More
Posted Under: Income Tax |

Draft Notification on foreign company resident in India U/s. 115JH

F No 370142/19/2017-TPL (15/06/2017)

CBDT invites comments and suggestions on the Draft Notification in respect of foreign company said to be resident in India under Section 115JH of the Income-tax Act, 1961...

Read More

Revision of Safe Harbour Rules: A Positive Thought!

In India, new transfer pricing rules were introduced in 2002. Since then, the number of cases identified for audit and the transfer pricing adjustments locked up in disputes have increased tremendously. In order to reduce the increasing number of transfer pricing audits and prolonged disputes...

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Posted Under: Income Tax |

Transfer Pricing- CBDT notifies tolerance limit for A.Y. 2018-19

Notification No. 50/2017-Income Tax (09/06/2017)

Central Government hereby notifies that where the variation between the arm's length price determined under section 92C of the Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one per cent of the latter in respect of wholesale trading and three per cent...

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Safe Harbour Rules- Eligible International Transactions

Prabhakar K S  [Ilaya Azwan] The Central Board Of Direct Taxes (CBDT) Vide Notification No. 46/2017 Date 7th June, 2017 Notifies Revised List Of ‘Eligible International Transactions’ For Transfer Pricing Safe Harbour Rules. Sl. No. Eligible International Transactions Circumstances   01 Software Development Services Operating Pr...

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Posted Under: Income Tax |
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