Taxation-us-based-wholly-owned-subsidiary-whichhas no-income

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vijay (Querist)
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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.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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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

vijay

vijay (Querist)
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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

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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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

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vijay

vijay (Querist)
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02 November 2012 Thanks once again,

Attribution rules for determining profit of PE are relevant, if so please specify the source.

vijay

vijay (Querist)
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06 November 2012 Pls Reply to the above question

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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06 November 2012 Vijay,

I am not clear with your query.

Anuj