Taxation-us based wholly owned subsidary which has no income

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Dear Respondents having exposure of corporate tax laws,

My query is There is US based wholly owned subsidary 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 subsidary in India.

As per FDI poilcies for wholly owned subsidary 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 Delitee there is a case law of  Whilrlepool 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.

 

 

 

 

 

 

 

 

 

Replies (1)

Tranfer pricing provisions wil  apply as these are assocaited enterprises within the meaning of sec92A(2) of the income Tax Act ,1962. Therefore, while computing income ,allowance for any expense shall also be determined having regard to arms length price.

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