Taxation-us-based-wholly-owned-subsidiary-whichhas no-income
This query is : Resolved
01 November 2012
Dear experts/ Respondents having exposure of corporate tax laws,
My query is There is US based wholly owned subsidiary which provides services from India to clients at international location on behalf of Company / Inc in US. For that Inc. will pay all admin cost & salaries of wholly owned subsidiary in India. As per FDI policies for wholly owned subsidiary all acts & regulations including income tax act are applicable as if it is Indian company. Is Transfer pricing will applicable in this case? because in website of Deloitei there is a case law of Whirlpool Inc/Pvt Ltd. in that specified that if there are no revenues Transfer pricing provisions will not apply. Looking for your reply only if you know.
Nature of Business / Indutry: Like BPO Assisting in Medical suits /cases, Callings / Transcription.
My query is There is US based wholly owned subsidiary which provides services from India to clients at international location on behalf of Company / Inc in US. For that Inc. will pay all admin cost & salaries of wholly owned subsidiary in India. As per FDI policies for wholly owned subsidiary all acts & regulations including income tax act are applicable as if it is Indian company. Is Transfer pricing will applicable in this case? because in website of Deloitei there is a case law of Whirlpool Inc/Pvt Ltd. in that specified that if there are no revenues Transfer pricing provisions will not apply. Looking for your reply only if you know.
Nature of Business / Indutry: Like BPO Assisting in Medical suits /cases, Callings / Transcription.
CA. Anuj Gupta
(Expert)
02 November 2012
No, you have misunderstood the thing.
If the Indian Company is wholly owned subsidiary of US Co. then transfer pricing shall apply for ANY transaction between "ASSOCIATED Enterprises" i.e. US Company and Indian Subsidiary.
Anuj
femaquery@gmail.com
If the Indian Company is wholly owned subsidiary of US Co. then transfer pricing shall apply for ANY transaction between "ASSOCIATED Enterprises" i.e. US Company and Indian Subsidiary.
Anuj
femaquery@gmail.com
02 November 2012
Thanks for responding,
Can you guide in with more details: like.,
required documents to prove the transactions
best suitable pricing method when no price has been charged by indian firm(My opinion is CUP metod
Can you guide in with more details: like.,
required documents to prove the transactions
best suitable pricing method when no price has been charged by indian firm(My opinion is CUP metod
CA. Anuj Gupta
(Expert)
02 November 2012
In case of BPO(as specified by you) Cost plus method is normally the most appropriate method.
Also the TP Report along with annexures should be prepared.
Anuj
femaquery@gmail.com
Also the TP Report along with annexures should be prepared.
Anuj
femaquery@gmail.com
Message likes :
1 times
02 November 2012
Thanks once again,
Attribution rules for determining profit of PE are relevant, if so please specify the source.
Attribution rules for determining profit of PE are relevant, if so please specify the source.
CA. Anuj Gupta
(Expert)
06 November 2012
Vijay,
I am not clear with your query.
Anuj
I am not clear with your query.
Anuj
14 November 2012
I agree with the experts
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