Increase in Transfer Pricing Resources Has Opened Up New Challenges

Ozg Transfer Pricing Consultant

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The Finance Minister, Mr Pranab Mukherjee, today hoped that CBDT’s capacity building initiatives on the transfer pricing (TP) front would augment the Government’s effort to mop up more revenues for development work, besides meeting emerging administrative challenges on TP regulations.
Mr Mukherjee also sees TP regulations playing a “special role” in ensuring that profits are not shifted from India through cross border transactions. The tendency to shift profit (from India) would be more prominent as India is among few countries exhibiting a higher growth, he said in his inaugural address at an international seminar on transfer pricing here on Wednesday.
Mr Mukherjee also highlighted that tendency for portability of profit will get further accelerated due to enhanced transfer pricing scrutiny by the other jurisdictions. The other jurisdictions are looking to generate more revenues from overseas investments particularly jurisdictions like India, which offers highly attractive returns on investments.
Since the introduction of TP legislation in 2001, the Transfer Pricing Directorate has made an adjustment of Rs 23,000 crore (about $5 billion), Mr Mukherjee said, adding that this was a great achievement in a small period of time. India, which is a relatively newcomer to TP enforcement, is tending to “gear up” its capabilities quickly by increasing the number of experts to 39 from 12 in 2006 for administration of transfer pricing. The increase in transfer pricing resources has opened new challenges of development and training of skilled manpower, he said.
Ms Caroline Silberztein, Head of Transfer Pricing Unit, OECD, noted that today India’s tax policies are more than ever exposed to international issues. She also said that OECD expects mutually beneficial cooperation with India and look forward to fruitful engagement with India in the coming years.
The three-day international seminar, organised by the Central Board of Direct Taxes and Organisation for Economic Cooperation and Development , will see discussions on complex transfer pricing issues such as valuation of intangibles and cost contribution arrangements.
Transfer pricing is a major international tax compliance issue as multinational entities tend to set transfer pricing on cross-border transactions to reduce taxable profits.
Feb. 17 / thehindubusinessline

Ozg Transfer Pricing Consultant

Ozg Center | London | New Delhi | New York | Mumbai

Back Office Phone # 0091-9811415861-72-84-92-94

Email: transfer.pricing@ozg.co.in

www.TransferPricingConsultant.com

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