International Taxation (Transfer Pricing and Double Taxation Avoidance Agreements (DTAA))
Talking about the International Taxation, our firm has a team of specialized members having expertise in International Taxation which includes Transfer Pricing, DTAA (Double Taxation Avoidance Agreements) and others. The International Taxation is a field where the taxing jurisdiction of two countries is involved. It is a study of different tax aspects involving cross – border transactions.
Transfer Pricing (TP): Commercial transactions between the different parts of the multinational groups may not be subject to the same market forces shaping relations between the two independent firms. One party transfers goods or services to another for a price. That price is known as “transfer price”. Basically, transfer price is a price which represents the value of good, or services between independently operating units of an organisation. The expression “Transfer Pricing” refers to prices of transactions between associated enterprises which may take place under conditions differing from those taking place between independent enterprises.
By using Transfer Pricing a corporate can save taxes by taking advantage of difference in tax laws between two countries. It applies to specific transactions such as acquisition of fixed assets, support services, IT services and software development, management and technical service fees etc. Transfer pricing allows for better pricing, higher efficiency and simplicity of the accounting process.
Our expert team provides the following Transfer Pricing (TP) services:
- Transfer Pricing (TP) Study and Documentation
- Transfer Pricing (TP) Audit
- Providing mechanism for correct pricing of goods/services
- Providing legal advice on tax avoidance while entering international transactions
- Selecting the appropriate method for computing the arm’s length price
- Performance Evaluation
- Compliance of applicable laws
- Drafting necessary Agreements
- Preparing Form 3CEB under Income-tax Act, 1961
- Penalty protection
Double Taxation Avoidance Agreements (DTAA) – Double taxation occurs when a taxpayer is subject to comparable tax on the same income or gains in more than one country, which in effect taxes income twice. The Double Tax Avoidance Agreement (DTAA) is a tax treaty signed between two or more countries to help taxpayers avoid paying taxes on the same income twice. It becomes applicable in cases where an individual is a resident of one country but earns income in another country. It is the most common type of international tax agreements.
The primary motive behind the DTAA is to make a country with best investment destination for the businesses by providing them relief on double taxation. India has entered into Double Taxation Avoidance Agreement with more than 80 countries in order to avoid levying taxes twice on the same income.
Our team provides the following services under Double Taxation Avoidance Agreements (DTAA):
- Examining the taxability under the provisions of the Act
- Interpretation of DTAA agreement
- Advisory services
- Provided relief from double taxation
- Better tax management services keeping in view the laws of India as well as oversees countries
- Reducing the hassles for taxpayers by making tax payments more transparent and simplified
- Providing better clarity regarding the taxation of certain cross border transactions.
- Examining the remedies available under the domestic laws and international treaties in order to reduce the burden of double taxation and to avoid potential disputes with tax departments.