siva

siva

  • Submitted By: 9176933266
  • Date Submitted: 12/03/2014 2:05 AM
  • Category: English
  • Words: 3517
  • Page: 15

Transfer Pricing Seminar - SICASA

CA Abhishek Jain
CA Kiran Jain
9 November 2014

Transfer Pricing
Basic Concepts

November 2014
CA Abhishek Jain & CA Kiran Jain

Transfer Pricing – Basics / Form 3CEB / Assessments

Simple Intra-group transactions

Product transfer

US Co

India Co
Transfer price = 80

Sales
Total Costs
Operating Profit

80
(60)
20

Sales
Cost of Goods
Gross Profit
Operating Expenses
Operating Loss

100

(80)
20
(25)
-5

Consolidated Operating Profit = 15
November 2014
CA Abhishek Jain & CA Kiran Jain

Transfer Pricing – Basics / Form 3CEB / Assessments

Effect of lower transfer price

Product transfer

US Co

India Co
Transfer price = 70

Sales
Total Costs

Sales

70

Cost of Goods
Gross Profit
Operating expenses
Operating Profit

(60)

Operating Profit 10

100
(70)
30
(25)
5

Consolidated Operating Profit = 15
Due to the special relationship between related parties,
the transfer price may be different than the price that
would have been agreed between unrelated parties
November 2014
CA Abhishek Jain & CA Kiran Jain

Transfer Pricing – Basics / Form 3CEB / Assessments

Rational for Introducing Transfer Pricing
Regulations
Finance Minister’s speech
“The presence of multinational enterprises in India and their ability to allocate
profits in different jurisdictions by controlling prices in intra-group
transactions has made the issue of transfer pricing a matter of serious concern. I had
set up an Expert Group in November 1999 to examine the detailed structure for transfer
pricing legislation. Necessary legislative changes are being made in the Finance Bill
based on these recommendations.”
- Mr Yashwant Sinha
Finance Minister, Government of India
February 28, 2001

November 2014
CA Abhishek Jain & CA Kiran Jain

Transfer Pricing – Basics / Form 3CEB / Assessments

An Introduction

Organisation for
Economic Cooperation
and Development...

Similar Essays