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Transfer Pricing

Subramanya Bhat (CA)     14 August 2020

Subramanya Bhat
 2 likes  68 points

| My Other Post

One of our clients is 100% subsidiary of a foreign company and provide services (export) only to the foreign parent company. For this there is a contract where they raise an invoice on monthly basis to the parent company which has a markup of 15%.

Due to unforeseen business reasons our client will not be providing any services for till end of the year and hence no invoice will be raised. From Transfer pricing Income tax point of view, will there be any challenges? Will Income Tax department, based on the contract consider any deemed income?

Thanks you in advance.


1 Like

Mr. Bhandari   03 September 2020

Mr. Bhandari

 31 points

View Profile | My Other Post

I don't see issue.. however if the nature of services are recurring and employees are dedicated towards it(Marketing support services, Business support services), than need to analyse the rationale for it.

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