International transaction
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 April 2012
i need the meaning of IT. what purpose? where can be applicable?
please explain about the Arm's Length Price
please explain about the Arm's Length Price
14 April 2012
IT stands of International Transaction or Income Tax or Information Technology or Institute of Technology or International Transactions or Indian Tourism. Now, in your case it can be 3 which are related to Income Tax.
The price at which two unrelated and non-desperate parties would agree to a transaction. This is most often an issue in the case of companies with international operations whose international subsidiaries trade with each other. For such companies, there is often an incentive to reduce overall tax burden by manipulation of inter-company prices. Tax authorities want to insure that the inter-company price is equivalent to an arm's length price, to prevent the loss of tax revenue.
The price at which two unrelated and non-desperate parties would agree to a transaction. This is most often an issue in the case of companies with international operations whose international subsidiaries trade with each other. For such companies, there is often an incentive to reduce overall tax burden by manipulation of inter-company prices. Tax authorities want to insure that the inter-company price is equivalent to an arm's length price, to prevent the loss of tax revenue.
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