Over past few decades India has witnessed rapid growth in international business transactions and thanks to Modi Government as the international trade flow has increased dramatically post 2014. Even in the recent DAVOS conference, many CEO’s of international MNC’s have promised to do business in India. Accordingly, the stupendous growth
MF and CBCR – Final Rules and Practical Challenges
Background In keeping with India’s commitment to implement the recommendations of Action Plan 13 of Base Erosion and Profit Shifting (BEPS), the Finance Act, 2016 introduced Section 286 of Income-tax Act, 1961 (the Act) providing for furnishing of Country-by-Country Report (CbCR) in respect of an International Group. Section 92D of
TP Challenges To Be Faced And Compliances
Form 3CEB Section 92E requires every person entering into an international transaction or specified domestic transactions with their related parties to obtain an accountant’s report to be submitted on or before the due date for filing tax return. Form 3CEB prescribed is declaration by the accountant about examination of
CBCR And Masterfile Requirements
The Organization for Economic Co-operation and Development (“OECD”) has recently released its final report on Action 13 – Transfer Pricing Documentation and Country by Country (“CbC”) reporting, under its Action Plan on Base Erosion and Profit Shifting (“BEPS”). Action 13 recommended a three-tiered approach to TP documentation as under:
Revised OECD Guidelines
The Organization for Economic Cooperation and Development (“OECD”), has recently revised the Transfer Pricing (“TP”) Guidelines for Multinational Enterprises (“MNEs”) and Tax Administrations. Mainly incorporating its guidance provided in the 2015 BEPS reports to align transfer pricing outcomes with value creation and transfer pricing documentation. The purpose of the
Amendment Safe Harbor Rules
The Finance (No 2) Act (FA), 2009 introduced provisions in the Indian Income-tax Law (ITL) that empowered the Central Board of Direct Taxes (CBDT), the apex Indian Tax Administration, to issue transfer pricing “safe harbor” rules. A “safe harbor” is defined in the ITL as circumstances in which the Tax
BEPS – HTVI (Hard To Value Intangibles )- Implementation guidance
What is BEPS? – Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies That exploit gaps and mismatches in tax rules to make profits ‘erode’ for tax purposes or To shift profits to locations where there is little or no real activity but the taxes are
CBCR Implementation Guidance
Country By Country Reporting – Implementation Guidance: Currently, CBCR compliances has become a matter of concern for all multinational enterprises (MNE). The Organization for Economic Cooperation and Development (OECD) as part of the BEPS project has been issuing guidance to the action points specified by it. Recently on 6
Amendment To Section 11- Prospective Or Reprospective And Domestic Transfer Pricing
Section 11of the Income-tax Act, 1961 (“Act”) provides for exemption of income derived from property held under a trust or legal obligation wholly for charitable purposes to the extent of income applied for such purposes in India. Such trust or legal obligation can accumulate or set apart not exceeding 15%
Transfer Pricing – Secondary Adjustment – More Ambiguity Than Clarity
Transfer pricing provisions in India and globally seek to ensure that there is no shift of profits or funds as against the functions being performed, risks absorbed and capital deployed in a specific jurisdiction i.e.,correct allocation of taxable profits amongst tax jurisdictions. In cases where the underlying transaction was not