Transfer Pricing

Transfer Pricing Regulations across the globe demand that every transaction between a related party is at arm’s length.

The “arm’s-length principle” of Transfer Pricing states that the amount charged by one related party to another for a given product must be the same as if the parties were not related.

Incidence of Transfer Pricing:

Transfer Pricing provisions come into play under the following circumstances:

• When business is divided into more department or division in the same country and;
  » Management requires to identify activities of the business that generate value.
  » A division of the group provides services or transfers goods to another division of the same company, and profitability of each division is required to be determined;
• In the case of cross border transactions:
  » When transactions whether relating to tangible goods, services, finance or intellectual property take place between entities under common ownership and control.