TRANSFER PRICING WING RAISES ADDITIONAL.RS.40K-CR TAX DEMAND
The transfer price wing of the incometax department, which looks into crossborder transactions of Indian companies, has made an additional tax demand of.Rs.40, 000 crore for fiscal 2011-12, double of last year, senior tax officials said. Out of the.Rs.40, 000 crore additional tax demand, more than.Rs.20, 000 crore was from the assessment of 11 multinationals, including foreign banks and telecom companies, who mispriced their cross-border transactions, a senior income-tax official said. It is not that these additions are going to recur year after year on these companies. These were one-off instances such as acquisition of another company, where we have found full transaction value had not been reported. Such additions may not recur every year, the official said. The transfer pricing regime has, this year, ventured into new territories such as intangibles including brand building and corporate guarantees given to associate companies. In all, over 2, 000 transfer pricing returns have been taken for scrutiny, of which additions were made in 1, 200 returns. Rest of the returns were accepted without any scrutiny. Transfer pricing rules were incorporated in the Finance Act 2001 in a bid to ensure that India does not lose revenue due to it from companies that undertake cross-border transactions between related parties. While most developed countries have already put in place their transfer pricing machinery, more and more countries in Asia and Africa are setting up their own transfer pricing mechanism to increase volume of trade between related parties, which is estimated to constitute 60% of global transactions. Our transfer pricing officers are at par with the best in the world. Some of the Indian officers have been selected by the OECD authorities for improving the current TP structure of OECD countries, a senior official said. - www.economictimes.indiatimes.com
The transfer price wing of the incometax department, which looks into crossborder transactions of Indian companies, has made an additional tax demand of.Rs.40, 000 crore for fiscal 2011-12, double of last year, senior tax officials said. Out of the.Rs.40, 000 crore additional tax demand, more than.Rs.20, 000 crore was from the assessment of 11 multinationals, including foreign banks and telecom companies, who mispriced their cross-border transactions, a senior income-tax official said. It is not that these additions are going to recur year after year on these companies. These were one-off instances such as acquisition of another company, where we have found full transaction value had not been reported. Such additions may not recur every year, the official said. The transfer pricing regime has, this year, ventured into new territories such as intangibles including brand building and corporate guarantees given to associate companies. In all, over 2, 000 transfer pricing returns have been taken for scrutiny, of which additions were made in 1, 200 returns. Rest of the returns were accepted without any scrutiny. Transfer pricing rules were incorporated in the Finance Act 2001 in a bid to ensure that India does not lose revenue due to it from companies that undertake cross-border transactions between related parties. While most developed countries have already put in place their transfer pricing machinery, more and more countries in Asia and Africa are setting up their own transfer pricing mechanism to increase volume of trade between related parties, which is estimated to constitute 60% of global transactions. Our transfer pricing officers are at par with the best in the world. Some of the Indian officers have been selected by the OECD authorities for improving the current TP structure of OECD countries, a senior official said. - www.economictimes.indiatimes.com
No comments:
Post a Comment