X Ltd, a Manufacturing company, sells products to its Associates, Y Ltd(40% holding) , singapore. It also sells the same products to Thailand company called Z ltd, which is not an associates or subsidiary.
The company sells the same products in domestic market also. If it compare with domestic market, the export price is very less. More over the price charged to the singapore and Thailand also not similar. The mostof the product price is charged based on the quataion and the market price prevailing outside the country to which it is exported. price also varying from time to time.
My question is how to compute transfer price in the above situation. Which method is suitable. The cost of the above product is available. But the comparable uncontrolled price is very difficutty to find out and Whether the selling price adopted for Thailand can be taken for comparable purpose.
09 November 2007
DEAR mani INthe given case it is varry clear to apply the you can consider the selling price . one of the your independent / uncontroled enterprises that you are all ready selling to singpore . so can easly take CUP METHOD , THAT IS COMPARIABLE UNCONTROLLED PRICE METHOD Here you can compare the selling price of an uncontrolled asoociates Yours muttu
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