Transfer pricing

Others 324 views 1 replies

PLEASE TELL ME THAT IN WHICH SITUATIONS ND WHICH METHOD OF TRANSFER PRICING SHOULD BE USED 

Replies (1)

Dear Ankita,

please see the below mentioned details which may help you out for deciding

Cost plus method (CPM): this method is generally used where semi finished products are transferred.

Comparable Uncontrolled Prices Method (CUP): ): this not favorable as no public database is accessible concerning prices apply by autonomous enterprises in import of comparable products.

Resale Price Method (RPM):): In this method the vendor adds comparatively small or no value to goods taken from associate enterprises. In the current case in this method may be taken as the very important method as similar data of comparable deals by independent entities is available.

Profit Split Method (PSM): PSM method is used when associate enterprises are so combined that it turns into difficult to make transfer pricing analysis on transactional methods basis.

Transactional Net Margin Method (TNMM): In this method generally apply in the case of transfer of partially completed products, distribution of completed goods and where RPM cannot be sufficiently applied. In general RPM more suitably applied in this case, TNMM is also not right.

with best regards

BHAVIN SHETH


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register