{"id":126045,"date":"2026-09-24T14:20:13","date_gmt":"2026-09-24T08:50:13","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=126045"},"modified":"2026-09-24T14:20:13","modified_gmt":"2026-09-24T08:50:13","slug":"transfer-pricing","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/transfer-pricing\/","title":{"rendered":"Transfer Pricing"},"content":{"rendered":"<h2><b>Transfer Pricing Latest News<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The Finance Minister recently urged BRICS nations to share their experiences on treaty interpretation and multilateral negotiations in international taxation, saying global transfer pricing disputes \u201cdisproportionately\u201d burden developing countries. <\/span><\/p>\n<h2><b>About Transfer Pricing<\/b><\/h2>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Transfer pricing refers to the<\/span><b> prices of goods and services <\/b><span style=\"font-weight: 400;\">that are <\/span><b>exchanged between companies under common control.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">For instance, <\/span><b>when a subsidiary company provides goods or services to its parent company or another subsidiary<\/b><span style=\"font-weight: 400;\"> within the same group, the price set for these transactions is known as the transfer price.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">They represent a complex and important aspect of business, in <\/span><b>particular for companies operating in different tax jurisdictions.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The transfer pricing method is generally <\/span><b>used by multinational companies (MNCs)<\/b><span style=\"font-weight: 400;\"> and their subsidiaries or sister companies <\/span><b>to allocate income and expenses.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Effective but legal transfer pricing<\/span><b> takes advantage of different tax regimes <\/b><span style=\"font-weight: 400;\">in different countries by <\/span><b>raising transfer prices for goods <\/b><span style=\"font-weight: 400;\">and services <\/span><b>produced in countries with lower tax rates.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">In some cases,<\/span><b> companies even lower their expenditure on interrelated transactions by avoiding tariffs<\/b><span style=\"font-weight: 400;\"> on goods and services exchanged internationally.\u00a0\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The <\/span><b>benefits <\/b><span style=\"font-weight: 400;\">of transfer pricing are<\/span><b> tax savings, profit allocation among subsidiaries<\/b><span style=\"font-weight: 400;\">, and <\/span><b>enhanced financial efficiency.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">However, transfer pricing<\/span><b> must comply with international regulations to avoid<\/b><span style=\"font-weight: 400;\"> issues such as <\/span><b>tax evasion.<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Companies must comply with the transfer pricing rules established by the countries in which they operate, <\/span><b>adhering to the arm&#8217;s length principle (ALP)<\/b><span style=\"font-weight: 400;\"> to <\/span><b>ensure transactions are priced as if they were between unrelated parties.\u00a0<\/b>\n<ul>\n<li style=\"text-align: justify;\"><b>ALP<\/b><span style=\"font-weight: 400;\">: <\/span><b>Related parties price transactions as if <\/b><span style=\"font-weight: 400;\">they were<\/span><b> transactions on an open market.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The <\/span><b>Indian transfer pricing regulations (ITPR) require<\/b> <b>that income<\/b><span style=\"font-weight: 400;\"> arising from \u2018international transactions\u2019 between \u2018associated enterprises\u2019 be <\/span><b>computed with reference to the ALP.<\/b><\/li>\n<\/ul>\n<\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">International transfer pricing disputes arise mainly as countries seek to ensure MNCs are subject to tax on profits attributable to their respective jurisdictions.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Accordingly, differences in allocation of taxable income among countries can give rise to disputes among taxpayers and tax authorities as well as those in different jurisdictions.<\/span><\/li>\n<\/ul>\n<p><b>News: <\/b><a href=\"https:\/\/theprint.in\/economy\/brics-should-work-together-on-transfer-pricing-as-disputes-burden-developing-nations-fm\/3051103\/\" target=\"_blank\" rel=\"nofollow noopener\"><b>TP<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Transfer Pricing refers to the prices of goods and services that are exchanged between companies under common control. Read more about Transfer Pricing, Meaning, Benefits, Latest News.<\/p>\n","protected":false},"author":23,"featured_media":126015,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[10468],"class_list":["post-126045","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-prelims-current-affairs","tag-transfer-pricing","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/126045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=126045"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/126045\/revisions"}],"predecessor-version":[{"id":126082,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/126045\/revisions\/126082"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/126015"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=126045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=126045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=126045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}