The concept of Transfer Pricing has assumed importance due to the increasing trend in the international transactions. It is not uncommon for the Corporate / Multinational Enterprises across the globe to set up a company or division in the other parts of the world. The transactions between these enterprises are known as “Related Party Transactions”. These related party transactions have raised certain complex issues from the point of view of taxation of each country. The ability of companies to control the prices in the related transactions, thereby, shifting the revenues to tax favorable jurisdiction or low tax jurisdiction, is a matter of concern for tax authorities worldwide.
As a result, prices adopted by Multinational Enterprises in related party transactions are increasingly being subject to scrutiny, and adjustments
The Finance Bill, 2001 introduced Transfer Pricing Regulation by amending the provision of section 92 of the Income Tax Act, 1961. Further, Rules 10A to Rules 10E of Income Tax Rules, 1962 provide the detailed Transfer Pricing provisions. Section 92E of the Income Tax Act, 1961 provides that every person who has entered into International Transaction is required to submit the report.
We undertake detailed study of the international transactions entered into by the enterprises with view to understand its impact from the point of the Income Tax Act, 1961. We also assist enterprises to arrive at the transfer prices which can be established as “arm’s length prices”. The study also encompasses the submissions made the enterprises to the other government authorities like the Customs and assist the companies to synchronize with the submission to be made to the Income Tax Authorities.
The provisions of the Income Tax Act, 1961 also requires certification from Chartered Accountant for transaction entered by the companies with its overeas entities. Our associate CA firm undertakes these audits and certification.
The firm provides representational services before quasi-judicial authorities and appellate tribunal in matters pertaining to Income Tax and Transfer Pricing.