Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: cpt :: Central Excise rule to resale the machines to a new company :: empanelment :: articles on VAT and GST in India :: TDS :: due date for vat payment :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: VAT RATES :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit
 
 
« Transfer Pricing »
 BMR Advisors’ corporate tax practice deal goes down to the wire
 Over 300 Income Tax commissioners transferred across country
 GST won't apply to transfer of immovable property
 Outlining the transfer pricing law in Thailand
 OECD releases 42 comments on transfer pricing guidance for hard-to-value intangibles
 Transfer pricing toolkit for developing nations’ tax systems
 Transfer Pricing adjustment for excessive marketing expenses taking a twist in India
 Indian secondary adjustments for transfer pricing: what you need to know about the new rules
 Interpretation Of Central Goods And Services Tax (CGST) Act (Part-10)
 CBDT notifies secondary adjustment rule in transfer pricing
  Revised Transfer Pricing Safe Harbour Rules Bring Cheer

Why the mad rush to implement a transfer pricing regime?
January, 27th 2016

Dr Peter Phillips, the finance minister, is about to undo all the good he has done with the economy by implementing the proposed transfer pricing regime.

The Government assures the country that this unconstitutional transfer pricing mechanism isn’t a tax, but an attempt to get affected businesses to pay their fair share of taxes. But anyone who has had to run any commercial enterprise, let alone a successful one, understands that businesses need to operate with clear rules of engagement upon which to base all sorts of contractual agreements, draft business plans, and project income, expenditure, profit and loss.

The question that still has not been answered is why this unholy rush to implement such a risky endeavour.

We can think of one possible reason:

The law compels companies to disclose related party transactions when filing 2015 tax returns, but the minister says no penalties will be applied in cases of breaches before 2016 tax returns which are filed in 2017. One is therefore left with the impression that this rush to disclose related party transactions in 2015 — without any understanding of the contractual basis of the transaction — is merely a means to gather data for determining who is to be audited and/or assessed.

The danger, of course, is that this approach creates an unnecessary bias which will prejudice what should be an orderly negotiation for an Advance Transfer Pricing Agreement with Tax Administration Jamaica, which is to be used for future tax returns.

But that is what you get when policies are based on abject cynicism and pander to the popular view that companies, to avoid taxes, have been cooking the books and manipulating the relationships existing among related parties.

Our business community deserves better than this. Most have been extraordinary corporate citizens, sticking with Jamaica through thick and thin. We are surprised that the finance minister is going ahead knowing fully well that the private sector does not have the necessary expertise, at this stage, to handle and implement the various requirements and will therefore need to hire external consultants, which is costly and time-consuming.

We now know that transfer pricing legislation is one of the most complex laws. That is why we are insisting that the transfer pricing rules and regulations must be clearly defined before implementation so that they can be understood, in order to avoid court sanction/imprisonment due to unintended breaches.

To do otherwise is unfair and creates uncertainty which could hurt businesses and investments in Jamaica. No business, whether old or new, local or foreign, can operate in an unstable environment.

Moreover, the failure of the tax authorities to begin public education of the populace on the transfer pricing regime is palpable indication that they themselves are unclear about the rules and regulations. It is instructive that the drafting and finalising of the Advanced Pricing Agreements are yet to commence.

A government concerned about growing businesses would complete its due diligence, followed by implementation in year of assessment 2016, thus allowing constructive and orderly negotiations that avoid ruining this country’s economy.

Dr Phillips needs to show that he understands this and that he cares.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Publishing Management System PMS News Management System Publishing Management System Development Online News Management System for media company custom Publishing management system development Survey management system Market Res

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions