Transfer pricing

Thanks Jyoti Rani for sharing.

I wish to know if dividend paid by indian subsidiary company to its foreign holding company is to be reported in Form 3CEB.

Also can you opine what should be the TP method to determine Arm's length price of international transactions where there are only international transactions with foreign related parties (AE) and there is a loss. Should it be TNMM or CUP. There are no international transactions with unrelated parties.

Regards,

Any responses...

Regards,

hiiiiiiiii there is thirteen conditions which is mentined sec 92A, for the applicability of transfer pricing.

if any indian subsidary company paid dividend to its foreign holding company.......there is no need in mention inthe report Form 3ECB ,

As it is not covered in that 13 condition which is mentioned in the above said section.

Sorry its form 3CEB

If there is no transaction with  unrelated parties ,

then TNMM method should apply for the calculation of Arm's length Price.

Jyoti rani

Thanks for your valuable responses. In this forum discussion on such issues are very limited.

But can TNMM be applied if there is a loss. Our CA who certified 3CEB is of the opinion that TNMM cannot be applied if there is a loss.

Regards,

ya if there is loss the no TNMM is not apply,

Step 1- first you to check whether there is associated and related parties is there or not.

step2- under which condition transfer pricing is applicable for that company.

step3. If it is applied how they are valued the pricing, means on what basis.

step4- which method is suitable for that company.

step5. after calculating Arms Length priceif there is loss, no need of considereing. it is applicable only in case of profit.

Jyoti Rani

So, if TNMM cannot be applied then which method to be used. Because, you see, CUP cannot be used as there are no comparable sales prices with unrelated parties in the year.

TNMM is a modified version of Cost Plus method-- so if TNMM cannot be used , Cost plus is also ruled out.

Our nature of service is such that Resale price method is not applicable also because there is no distribution of services.

Look forward to your valued views, please.

Regards,

any way TNMM will apply but if is not apply then Residual method will apply but only thismethod is applicable for this financial year.