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Transfer Pricing Theory & Practice – Indian Perspective (Set of 2 Volumes)

Transfer Pricing Theory & Practice – Indian Perspective (Set of 2 Volumes)

by Hari Om Jindal
About Book:
  • The concept of ALP Principle has to change from, “Separate entity approach” to “Group approach”.
  • Why TP is considered as a Statistical Game of Mean - Mode – Median?
  • Should the under performers have no right to do business with associated entities?
  • One has to distinguish TP adjustments, which arises due to problem of income allocation between the AEs or due to tax avoidance or tax evasion.
  • The purpose of TP provisions is to avoid shifting of profits, which is not possible unless there is participation in capital. Influence of one enterprise on other in commercial transactions does not result in shifting of profits, hence, TP should not apply.
  • The current system of benchmarking under TP can work only in countries having prefect market conditions and is not workable where market conditions are not perfect like the developing countries as India or other countries.
  • Business models, compensation models are more important than FAR analysis.
  • Ignorance of business model (cost plus model, fixed price model etc.), ignorance of market conditions (prefect market, developing market and under developed market etc.), and heavy reliance on TNMM have led to unnecessary and avoidable adjustments.
  • It is important to note that, though, the benchmarking is done between control transactions and uncontrolled transactions, however, comparison has to be made at four different levels. It has to be at Group Level, Enterprise Level, Segment Level and Transaction Level.
  • Even under the TNMM, product, function and business model etc. are equally relevant.
  • CUP method is not the best method in all situations even the comparables are available. It is seen that in approx. 40 to 50% cases CUP method cannot be applied
  • even comparables are available. Similarly, it is wrong to say that TNMM is method of last resort. In approx. 40 to 50% cases, it can be method of first choice even comparables are available under CUP Method.
  • Cases on Captive Service Providers constitutes approx. 25% of total decided cases. We have done as special research analysis on published cases on CSP.
  • Almost all cases of captive service providers seem to be decided by wrong benchmarking, where, either the method was wrong or the selection of the comparables was wrong!
  • It is interesting to know that even a small transaction of 5% to 10% of total revenue/cost are justified based on TNMM, which is nothing but misapplication of TP provision.
  • There should be limit of number of adjustments and % of adjustments required in ALP determination.
  • Why 3D analysis (three-dimensional analysis of assessee, AE and Industry’s analysis) should be done before proposing any TP adjustments?
  • Transaction by transaction approach without taxpayer's right to adjust its income downward, which is even allowed in the US laws, results in tax on notional income.
  • Why burden of proof is always on the taxpayers? Why compliance cost of taxpayers should not be considered before asking for various information.
Categories: Transfer Pricing
Publisher: Wolters Kluwer
About Publisher:

Wolters Kluwer Tax & Accounting in India (www.cchifirm.co.in), provides publishing, software and services that deliver vital insights, intelligent tools and guidance of subject-matter experts as well as offer subscription-based products with high quality content in areas including direct and indirect taxation, international taxation, corporate law and several other related topics. Wolters Kluwer Tax & Accounting (a Wolters Kluwer business) is part of the Wolters Kluwer Group, a leading global information service provider for professionals. Wolters Kluwer Tax & Accounting publications cover a wide range of topics such as tax, accounting, law, financial planning, human resources and training.

Author: Hari Om Jindal
About Author:
Hari Om Jindal :

1. Sh. Hari Om Jindal qualified the Chartered Accountancy Course (ICAI) in the year 1989 and became FCA in 1994. He completed his Bachelor of Commerce (Honours) from Kurukshetra University, India in 1985. He has also done Certificate Course on International Taxation from Institute of Chartered Accountant of India in 2009.
2. He is practicing Chartered Accountant in India since 1989.
3. His practice area includes, domestic taxation, international taxation and transfer pricing.
4. He has written following books;

➢ Indian Transfer Pricing in relation to International Taxation, 2015 edition published by Young Global; [https://www.linkedin.com/pulse/transfer-pricing- relation-international-transactions-young-global-s][ https://www.amazon.in/Transfer-Pricing-Relation-International- Transactions/dp/8188274283]

➢ Law Relating to Transfer Pricing with OECD Transfer Pricing Guidelines, 2011
edition published by Taxmann; [https://www.taxmann.com/bookstore/

professional/law-relating-to-transfer-pricing-with-oecd-transfer-pricing- guidelines-2010.aspx]

➢ Business Expenditure Law and Practice with CD (Set of 2 Volumes), first edition in 2007 and second edition in 2008 published by Taxmann. [https://www.scribd. com/doc/116915222/Taxmann-Books]

5. He was managing editor of "Global Taxation" a journal on international taxation, transfer pricing & BEPS. [https://ke.linkedin.com/in/young-global-s-60063bba]
6. Earlier, he was also Coordinating Editor of "International Taxation", a journal on international taxation, from 2009 to 2014.
7. He was also Coordinating Editor of Taxmann's website on international taxation (https://ilt.taxmann.com/index.aspx) from 2011 to 2013.
8. He is also transfer pricing advisor to Mauritius Government (Mauritius Revenue Authority)
9. He has attended IFA World Congress held in Rome 2010 (Italy), Boston 2012 (USA), Mumbai 2014 (India), Madrid 2016 (Spain) and he was also Indian branch joint reporter on transfer pricing (one of the two scientific subjects) for IFA 2017 World Congress, held in Brazil.
10. He has written more than 100 articles on income tax, transfer pricing, international taxation and service tax,


Similar Books

Ratings and Reviews

Overall Rating
Review
About Book:
  • The concept of ALP Principle has to change from, “Separate entity approach” to “Group approach”.
  • Why TP is considered as a Statistical Game of Mean - Mode – Median?
  • Should the under performers have no right to do business with associated entities?
  • One has to distinguish TP adjustments, which arises due to problem of income allocation between the AEs or due to tax avoidance or tax evasion.
  • The purpose of TP provisions is to avoid shifting of profits, which is not possible unless there is participation in capital. Influence of one enterprise on other in commercial transactions does not result in shifting of profits, hence, TP should not apply.
  • The current system of benchmarking under TP can work only in countries having prefect market conditions and is not workable where market conditions are not perfect like the developing countries as India or other countries.
  • Business models, compensation models are more important than FAR analysis.
  • Ignorance of business model (cost plus model, fixed price model etc.), ignorance of market conditions (prefect market, developing market and under developed market etc.), and heavy reliance on TNMM have led to unnecessary and avoidable adjustments.
  • It is important to note that, though, the benchmarking is done between control transactions and uncontrolled transactions, however, comparison has to be made at four different levels. It has to be at Group Level, Enterprise Level, Segment Level and Transaction Level.
  • Even under the TNMM, product, function and business model etc. are equally relevant.
  • CUP method is not the best method in all situations even the comparables are available. It is seen that in approx. 40 to 50% cases CUP method cannot be applied
  • even comparables are available. Similarly, it is wrong to say that TNMM is method of last resort. In approx. 40 to 50% cases, it can be method of first choice even comparables are available under CUP Method.
  • Cases on Captive Service Providers constitutes approx. 25% of total decided cases. We have done as special research analysis on published cases on CSP.
  • Almost all cases of captive service providers seem to be decided by wrong benchmarking, where, either the method was wrong or the selection of the comparables was wrong!
  • It is interesting to know that even a small transaction of 5% to 10% of total revenue/cost are justified based on TNMM, which is nothing but misapplication of TP provision.
  • There should be limit of number of adjustments and % of adjustments required in ALP determination.
  • Why 3D analysis (three-dimensional analysis of assessee, AE and Industry’s analysis) should be done before proposing any TP adjustments?
  • Transaction by transaction approach without taxpayer's right to adjust its income downward, which is even allowed in the US laws, results in tax on notional income.
  • Why burden of proof is always on the taxpayers? Why compliance cost of taxpayers should not be considered before asking for various information.
Categories: Transfer Pricing
Publisher: Wolters Kluwer
About Publisher:

Wolters Kluwer Tax & Accounting in India (www.cchifirm.co.in), provides publishing, software and services that deliver vital insights, intelligent tools and guidance of subject-matter experts as well as offer subscription-based products with high quality content in areas including direct and indirect taxation, international taxation, corporate law and several other related topics. Wolters Kluwer Tax & Accounting (a Wolters Kluwer business) is part of the Wolters Kluwer Group, a leading global information service provider for professionals. Wolters Kluwer Tax & Accounting publications cover a wide range of topics such as tax, accounting, law, financial planning, human resources and training.

Author: Hari Om Jindal
About Author:
Hari Om Jindal :

1. Sh. Hari Om Jindal qualified the Chartered Accountancy Course (ICAI) in the year 1989 and became FCA in 1994. He completed his Bachelor of Commerce (Honours) from Kurukshetra University, India in 1985. He has also done Certificate Course on International Taxation from Institute of Chartered Accountant of India in 2009.
2. He is practicing Chartered Accountant in India since 1989.
3. His practice area includes, domestic taxation, international taxation and transfer pricing.
4. He has written following books;

➢ Indian Transfer Pricing in relation to International Taxation, 2015 edition published by Young Global; [https://www.linkedin.com/pulse/transfer-pricing- relation-international-transactions-young-global-s][ https://www.amazon.in/Transfer-Pricing-Relation-International- Transactions/dp/8188274283]

➢ Law Relating to Transfer Pricing with OECD Transfer Pricing Guidelines, 2011
edition published by Taxmann; [https://www.taxmann.com/bookstore/

professional/law-relating-to-transfer-pricing-with-oecd-transfer-pricing- guidelines-2010.aspx]

➢ Business Expenditure Law and Practice with CD (Set of 2 Volumes), first edition in 2007 and second edition in 2008 published by Taxmann. [https://www.scribd. com/doc/116915222/Taxmann-Books]

5. He was managing editor of "Global Taxation" a journal on international taxation, transfer pricing & BEPS. [https://ke.linkedin.com/in/young-global-s-60063bba]
6. Earlier, he was also Coordinating Editor of "International Taxation", a journal on international taxation, from 2009 to 2014.
7. He was also Coordinating Editor of Taxmann's website on international taxation (https://ilt.taxmann.com/index.aspx) from 2011 to 2013.
8. He is also transfer pricing advisor to Mauritius Government (Mauritius Revenue Authority)
9. He has attended IFA World Congress held in Rome 2010 (Italy), Boston 2012 (USA), Mumbai 2014 (India), Madrid 2016 (Spain) and he was also Indian branch joint reporter on transfer pricing (one of the two scientific subjects) for IFA 2017 World Congress, held in Brazil.
10. He has written more than 100 articles on income tax, transfer pricing, international taxation and service tax,

Similar Books

Ratings and Reviews

Overall Rating
Review
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