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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« Budget Extravaganza »
 How Union Budget 2018 impacts individual taxpayers
  How Budget 2018 will be different due to GST
 This is how Budget 2018 announcements may help you save tax
 Here's why the government advanced the Budget date
 Will Budget 2018 Reduce Your Income Tax? 10 Expectations
 How Budget 2018 will be different due to GST
 Will Budget 2018 cut tax on switch from dividend to growth option in mutual funds?
 Startup eco-system looks forward to the budget for addressing tax dilemma
 High time to prioritise non-tax revenue in the Budget
 Govt may abolish dividend distribution tax in budget
 Budget making in the GST era: paradigm shift

Advance pricing to boost offshoring
July, 06th 2009

India should rationalise its transfer pricing norms and introduce the concept of advance pricing arrangement (APA) to retain its position as an attractive offshoring destination, a leading tax expert has said.

Most multinationals want simple and rational transfer pricing norms as offshoring is essentially a thin margin business. The comparables that are used sometimes tend to ignore this reality, Steven E Fortier, global managing principal, global transfer pricing services, KPMG, told ET.

APA is an agreement between a taxpayer and tax authorities that allows both to set out in advance the method of determining the transfer pricing for inter-company transactions. Most countries allow for APAs under their transfer pricing regulations as they help prevent actual or potential pricing disputes in a co-operative manner.

They also provide an alternative to traditional dispute resolution. Industry and tax experts in India have demanded APAs be put in place ever since transfer pricing laws were introduced in the country in 2001. CII has pitched for APAs in its pre-Budget memorandum to Finance Minister Pranab Mukherjee.

Taxpayers should be allowed to use a method (other than prescribed by the Central Board of Direct Taxes) that is most relevant to determine arms length price in an international transaction, provided the assessee can demonstrate that such a method is more relevant to business operations or specific transactions, CII said.

Transfer pricing provisions in general require income arising from an international transaction between two or more related organisations to be calculated at an arms length price. The basic test of this is that they should be comparable to similar transactions between unrelated parties.

He pointed out that APAs provide much-needed certainty that foreign companies look for while making an investment decision. Also, APAs prevent unnecessary and protracted litigation that are going on over transfer pricing in India, he pointed.

While a sub-group set up under the international taxation division of CBDT, the apex body administering direct taxes, had made a recommendation in this regard in 2007, there has been little progress. Bilateral agreements with countries to make APAs more effective for multinational corporate taxpayers should also be looked at, he said.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

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