International Taxation & TP

What is the objective of Equalization Levy? Equalization levy is introduced to reduce the unfair advantage enjoyed by multinational digital enterprise over its Indian competitors and ensure fair market competition. Is Equalization Levy an income tax? No. Equalization levy is not tax on income. It is levied on payments. For

Action 13 of the action plan on base erosion and profit shifting (BEPS action plan, OECD, 2013) requires the development of “rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that

OECD is an international economic organisation of 34 countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices

Amendment to Indian TP Rules allowing use of Multiple Year data and Range Rules: (Vide Notification no: 83/2015 dated 19 October 2015 w.e.f 01.04.2014): The amended rules allow the use of “multiple year data” and “range concept” for determination of ALP for undertaking a transfer pricing comparability analysis. Multiple Year

Rule 10B(1)(e)(iii) provides that an adjustment should be made to the profit margin of independent comparable companies to take into account the differences in functions and risks. International commentaries on transfer pricing also recognize that controlled and uncontrolled transactions are comparable only when adjustments with respect to significant differences between

The TP Regulations in India were introduced in 2001 under the anti-abuse provisions of the Income-tax Act, 1961 (ITA) largely modelled on the TP principles followed by the organisation for Economic Cooperation and development (OECD) and aimed to ensure that transactions between group companies adhere to the arm’s length standard.

Section 92CA of the Indian Income Tax Act provides that an Assessing Officer may make a reference to a Transfer Pricing Officer (TPO) for computation of arm’s length price (ALP). In India, TP audits are conducted by specialist officers notified as Transfer Pricing Officers (‘TPO’) by the CBDT. The DGIT

Tax Credit refers to granting credit of taxes deducted at source while computing the tax paid by the recipient of income. The Income Tax Act provides relief mechanism for foreign tax credit for the treaty countries and non –treaty countries separately. Provisions of section 90(2) provides for foreign tax credit

1. Transfer Pricing (‘TP’) continuous to be the most controversial areas in international tax and more particularly in India. It is reported that more TP disputes arise in India vis-à-vis all other countries put together. Opinions continue to differ in India on various aspects of transfer pricing ranging from what

Income or profits which result from international activities such as cross border investment may be taxed where the income is earned (source country) or where the person who receives it normally based (Country of residence).  Residence taxation of income is based on principle that the people and firms should contribute