The judgment rejected the practice of assigning a nil arms length price merely because a taxpayer reported financial losses. The court emphasized that transfer pricing rules focus on pricing, not profitability.
The ruling clarifies that payments for off-the-shelf software are not royalty. It eliminates TDS liability unless a permanent establishment exists.
India-Switzerland MFN clause suspension may cost $100 billion in Swiss investment, raising tax rates on dividends and impacting the India-Swiss DTAA benefits.
Explore the intricacies of Transfer Pricing on Intra-Group Guarantees in India. This detailed discussion covers the meaning, determination of Arm’s Length Price, popular methods, and ongoing debates. Stay informed to navigate Transfer Pricing regulations effectively.
Find out how Nykaa issued Bonus Shares in the ratio of 5:1 to its existing shareholders & how to calculate Capital Gain on Issue of Bonus Shares (The Nykaa Strategy). Get the story of Nykaa and its IPO now!
Arm’s Length Price of a transaction can be referred to as such price at which the business profits can be maximized commensurating with the functions performed, assets utilized and risk assumed in such transaction including the fundamental criterion of allocating business income/profits in different tax jurisdictions.
The Income-tax Act was introduced in 1961 adopting the erstwhile Act of 1922 wherein the laws on taxation of MNEs became significantly important soon after the globalization of the Indian Economy. India has never become part of the OECD; however, UN Model has already adopted the OECD Model of Transfer Pricing back in the 1980s.
