linkedin twitter
Prowess Largest Database of Financial Performance of Indian Companies
Powered by a Versatile Software that Empowers the User.
Prowess Database
Prowess User Interface
Prowess Reports
Applications of Prowess
Transfer Pricing
Credit Appraisal
Seek Clarifications
27 Apr 2012 6:12 PM

Transfer Pricing

Related Articles
Transfer Pricing
Why Prowess?
Credibility of independence
What Prowess can do for Transfer Pricing?
Select Major Clients

The case for transfer pricing taxation arises when two related parties conduct a transaction across different tax regimes, at a price that is outside an arm's length range. Transfer pricing rules therefore involve comparing prices charged in related party transactions to those charged in similar transactions by unrelated parties.

However, since the price at which transactions are actually conducted is not usually available, transfer pricing rules permit the use of profitability as an alternate measure to the arm's length price.

In making comparisons between the profitability of the target company and the unrelated companies, it is imperative that the unrelated companies are selected such that they reflect the same or similar business and business environment as of the target company.

Prowess is an indispensable tool in finding such comparable but unrelated parties and also in determining the "arm's length" profitability.