TRANSFER PRICING IS AN IMPENDING MAJOR TAX CHALLENGE FOR COMPANIES ESPECIALLY MULTINATIONALS

Recently, one of the big four international accounting firm Ernst & Young has conducted a survey on transfer pricing

According to the survey,

There is a dramatic increase in the scope of Transfer Pricing documentation required by governments with penalties imposed more frequently and at higher levels when multinationals get it wrong.
Governments are constantly searching for tax revenues [...]

November 2nd, 2009 | Tags: , | Category: TRANSFER PRICING | Leave a comment

WHAT IS ARM’S LENGTH PRINCIPLE AND WHAT ARE THE METHOD TO DETERMINE ARM’S LENGTH

Arm length transaction is a very hot topic in transfer pricing. This article seeks to explain what it means “ at arm length and what are some of the traditional methods to determine “ arm length” 

“ At Arm Length”  means that a transaction performed within a company must be priced as if carried out between two [...]

October 19th, 2009 | Tags: , | Category: Performance Mgmt, TRANSFER PRICING | Leave a comment

A Comprehensive List of Management Services

CLICK TO THE MAIN PAGE FOR ALL ARTICLES ON SHARED SERVICE CENTRE 

Further to my earlier article on management fee/transfer fee and the type of management services to be rendered, append below is a very comprehensive list of management services issued by our Malaysian Custom Authorities who is also in charge of the service tax:

(i) Corporate Affairs [...]

October 5th, 2006 | Tags: | Category: Corporate Tax, Shared Service Centre, TRANSFER PRICING | One comment

Drafting/Formulating Management Services As Part of Management Fee/Transfer Pricing Strategy

If we noticed that many companies charge management fee as part of the transfer pricing strategy. So what type of services can we name so as to able to justify charging management fee?

Append below are examples that you may considered to draft as management services for charging the management fee. The quantum and justification need to [...]

July 11th, 2006 | Tags: , , | Category: TRANSFER PRICING | Leave a comment

Transfer Pricing Systems :Methods & Selection(Part C)

a) Comparable Uncontrolled Price (CUP):- This method seeks to determine the ALP by comparing the controlled transaction with the uncontrolled transaction in relation to property transferred or services provided. This method is basically applied to concerns engaged in the manufacturing and selling of the product and hence to be applied to manufacturers.

Typical transactions in respect to which CUP may be adopted:-

  1. Transfer of goods
  2. Provision of services
  3. Intangibles
  4. Loans, provision of finance

The Comparable uncontrolled price method shall be determined in the following manner:-

  1. Identify the price charged or paid for property transferred or services provided in a comparable uncontrolled transaction
  2. Such price is adjusted to account for differences, if any, between the international transaction and the uncontrolled transaction or between the enterprises entering into such transactions, which could materially affect the price in the open market
  3. The price so adjusted is taken to be the arm’s length price in relation to the international transaction
  4. The arm’s length price is compared with the price charged in the international transaction
  5. If the price charged in the international transaction is lower than the arm’s length price or the price paid in the international transaction is higher than the arm’s length price then an adjustment is to be made to the price charged or paid in the international transaction by the amount of such variance

Continue reading Transfer Pricing Systems :Methods & Selection(Part C)

March 13th, 2006 | Tags: , | Category: ASIA PACIFIC REGION, India, TRANSFER PRICING | Leave a comment
 
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