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What is Transfer Pricing Audit?

Siddhant (Student) (40 Points)

13 October 2007

Dear All,

i want to know about Tranfer Pricing Audit?

what one has to do in it,what does it comprise of and so on???

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CA.Saibaburao Nanduri (Chartered Accountant) (3847 Points)
Replied 13 October 2007

Dear Siddhant ! Transfer pricing relates to the inter-company pricing arrangements between associated business entities. Inter-company transactions across borders are increasing rapidly and are becoming much more complex. Global integration and new business practices challenge multinational corporations to find innovative transfer pricing solutions. Stricter penalties, new documentation requirements, increased information exchange, improved training and specialization are some of the tools used by tax authorities in this global "profit race".