2 Replies
Ritesh.D.jain
(CA Job)
(232 Points)
Replied 03 March 2008
Transfer pricing is simply the act of pricing of goods and services or intangibles when the
same is given for use or consumption to a related party (e.g. Subsidiary)
There can be either Market-based, i.e. equivalent to what is being charged in the outside
market for similar goods, or it can be non-market based. Importantly, two-thirds of the
managers say their transfer pricing is non-market based.
There can be internal and external reasons for transfer pricing. Internal include
motivating managers and monitoring performance, e.g. by putting a cost to imported
inputs. External would be taxes and tariffs
Nagaraju Pogula
(Partner)
(175 Points)
Replied 03 March 2008
continuation to the above...
What are the implications from Income Tax act ?
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