Transfer Pricing- Practical Issue

Rahul (CA Practice ) (1818 Points)

18 June 2010  

Dear All

I am facing one practical issue in Transfer Pricing. I need to resolve it urgently.

Parent Company ( P ) of my client give some guarantee for Loans to the Subsidiary Company ( S ) in India. Parent Company charges some fees for such guarantees equal to .3% of the Guaranteed Amount.

Now my Questions are :

1) Whether Transfer pricing applies in such situation?

2) If yes then what should be the comparative for computation of Arms Length Price.?

 

Regards

 

Rahul Srivastava