Change to India’s 5% margin creates more confusion
March 23, 2011
Salman Shaheen - ITR
The change to India’s 5% margin, for the determination of the arm’s-length price, made in the recent budget, was intended to simplify the process for taxpayers but it has only created further confusion.
India’s transfer pricing regulations, introduced in 2001, said if the actual price of an international transaction does not exceed the 5% margin (the difference between the actual price and the arm’s length price) it will be accepted.
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