Essay About Associated Enterprises And International Transaction

Transfer Pricing in India
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Auditing & Documentation
under
Transfer Pricing Law in India
NIRC OF ICWAI
JAIN K. VRIND & CO. AChartered AccountantsACA. KRISHAN VRIND JAIN
Sco 345-346, sector 35-B, Chandigarh.
Auditing & Documentation
under
Transfer Pricing Law in India
NIRC OF ICWAI
JAIN K. VRIND & CO. AChartered AccountantsACA. KRISHAN VRIND JAIN
Sco 345-346, sector 35-B, Chandigarh.
M 09417009490, [email protected]
DEC 17TH, 2008
LegislativeOverviewLegislative Overview
.Legislation introduced with effect from April 1, 2001
..Built on OECD Guidelines, but with significant deviations
.Provisions applicable only if:
..Their is an international transaction(s) [defined in Sec 92B] between..
..Two or more Associated enterprises [defined in Sec 92A].
.Exceptions
LegislativeOverviewLegislative Overview
.Legislation introduced with effect from April 1, 2001
..Built on OECD Guidelines, but with significant deviations
.Provisions applicable only if:
..Their is an international transaction(s) [defined in Sec 92B] between..
..Two or more Associated enterprises [defined in Sec 92A].
.Exceptions
..Provisions do not apply in certain cases [Section 92(3)] (if it amounts to reduction)
.Deeming provisions [Section 92B(2)]
..Transaction between an enterprise and a person (other than an associated enterprise)
shall be deemed to be a transaction between two associated enterprises, if there
exists a prior agreement or the terms of such a international transaction are in
substance determined between one of these entities and the associated enterprise of
the other contracting entity.
The transaction may be
Purchase, sale or lease of tangible or
intangible property; or
Provision of services; or
Lending or borrowing money; or
Any other transaction having a bearing on profits,
Any other transaction having a bearing on profits,
income, losses or assets of an AE.
Cost sharing arrangement, that is, a mutual
agreement or arrangement between AEs for the
allocation or apportionment of, or contribution to
any cost or expense incurred in connection with a
“benefit, service or facility” provided to the AE.
The transaction may be
Purchase, sale or lease of tangible or
intangible property; or
Provision of services; or
Lending or borrowing money; or
Any other transaction having a bearing on profits,
income, losses or assets of an AE.
Cost sharing arrangement, that is, a mutual
agreement or arrangement between AEs for the
allocation or apportionment of, or contribution to
any cost or expense incurred in connection with a
“benefit, service or facility” provided to the AE.
An “enterprise” is an AE:Which
participates directly or indirectly in the
management or control or capital of the other
enterprise. This can be explained as under:
An “enterprise” is an AE:Which
participates directly or indirectly in the
management or control or capital of the other
enterprise. This can be explained as under:
An “enterprise” is an AE:If
any person who participates in the
management or control or capital of an
enterprise also participates in the
management or control or capital of the other
An “enterprise” is an AE:If
any person who participates in the
management or control or capital of an
enterprise also participates in the
management or control or capital of the other
Enterprises deemed to be AEs
if at any time during the year
A holds at least 26% of the voting power of
B; (A & B are AEs) or
A holds at least 26% of the voting power of
B & C; (B & C are AEs) or
A d l B i i l