Transfer Pricing

Transfer price is one regulation which is changing every day. With the ever changing global dynamics the need of better Transfer Pricing is a continuous and constant.

Transfer Price is the Price at which goods and services are transferred from one party to another. But the expression “transfer pricing” generally refers to prices of transactions between associated enterprises which may take place under conditions differing from those taking place between independent enterprises. The effect of transfer pricing is that the parent company or a specific subsidiary tends to produce insufficient

The effect of transfer pricing is that the parent company or a specific subsidiary tends to produce insufficient taxable income or excessive loss on a transaction. For example, a group which manufacture products in a high tax countries may decide to sell them at a low profit to its affiliate sales company based in a tax haven country. That company would in turn sell the product at an arm’s length price and the resulting (inflated) profit would be subject to little or no tax in that country. The result is revenue loss and also a drain on foreign exchange reserves.

To avoid this, the Finance Act, 2001 introduced law of transfer pricing in India through sections 92A of the Indian Income Tax Act, 1961 which guides computation of the transfer price and suggests detailed documentation procedures. Transfer Pricing Regulations are applicable to the all enterprises that enter into an ‘International transaction’ with an ‘Associated Enterprise’. Therefore, it is applicable to all cross border transactions entered into between associated enterprises.

We help our clients with the following the services

– Transfer Pricing Documentation

– Transfer Pricing Reporting

– Transfer Pricing analysis

– Transfer Pricing Assessment

– Transfer Pricing Audit