Objectives & Agenda :
To understand the rationale behind Transfer Pricing and the need for documentation. To know the contents of Transfer Pricing Report in detail and appendix to Transfer Pricing Report. The webinar would cover a detailed process for preparation of Transfer Pricing Report.
Overview of Transfer Pricing in India - EY IndiaSadanandGahivare
Read about transfer pricing in India & its applicability which can help you build and implement the structure that makes sense for your business & to manage the cost of trade.
A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Contract is a branch of the law of obligations in jurisdictions of the civil law tradition. Contract law concerns the rights and duties that arise from agreements.
A contract arises when the parties agree that there is an agreement. Formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound. Each party to a contract must have capacity to enter the agreement. Minors, intoxicated persons, and those under a mental affliction may have insufficient capacity to enter a contract. Some types of contracts may require formalities, such as a memorialization in writing.
Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller's promise to deliver title to the property. These common contracts take place in the daily flow of commerce transactions, and in cases with sophisticated or expensive precedent requirements, which are requirements that must be met for the contract to be fulfilled.
Objectives & Agenda :
To understand the rationale behind Transfer Pricing and the need for documentation. To know the contents of Transfer Pricing Report in detail and appendix to Transfer Pricing Report. The webinar would cover a detailed process for preparation of Transfer Pricing Report.
Overview of Transfer Pricing in India - EY IndiaSadanandGahivare
Read about transfer pricing in India & its applicability which can help you build and implement the structure that makes sense for your business & to manage the cost of trade.
A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Contract is a branch of the law of obligations in jurisdictions of the civil law tradition. Contract law concerns the rights and duties that arise from agreements.
A contract arises when the parties agree that there is an agreement. Formation of a contract generally requires an offer, acceptance, consideration, and a mutual intent to be bound. Each party to a contract must have capacity to enter the agreement. Minors, intoxicated persons, and those under a mental affliction may have insufficient capacity to enter a contract. Some types of contracts may require formalities, such as a memorialization in writing.
Contracts may be bilateral or unilateral. A bilateral contract is an agreement in which each of the parties to the contract makes a promise or set of promises to each other. For example, in a contract for the sale of a home, the buyer promises to pay the seller $200,000 in exchange for the seller's promise to deliver title to the property. These common contracts take place in the daily flow of commerce transactions, and in cases with sophisticated or expensive precedent requirements, which are requirements that must be met for the contract to be fulfilled.
This is an attempt to explain the broad concept of and rationale behind Transfer Pricing Regulations. Also gives a high level view of the scheme of Indian Transfer Pricing Regulations as on date. Points out the TP controversies in India. Above all gives a well spirited guidance on dealing with TP in India.
Is COVID-19 a Force Majeure Event? – Legal & Statutory PositionDVSResearchFoundatio
OBJECTIVE
In this webinar, we will understand the meaning and legal basis of a force majeure event. We shall discuss if COVID-19 will trigger a force majeure clause and whether this outbreak is considered by Indian Government as force majeure. Further, statutory relaxations announced by the Government of India in the light of COVID-19 outbreak will be discussed. Finally, the webinar will also cover the practical suggestions if force majeure event is attracted.
What is VAT ?
What is covered under VAT ?
At what rate to charge for which Items ?
When to charge ?
When to pay ?
What happens to sales returns and Bad Debts ?
What records to keep and how long to keep ?
When, how and with what information to file returns ?
What are the penalties for non-compliance ?
The standard VAT rate will be 5% unless a zero rate or exemption applies.
The Member States have the right to subject the following sectors to a zero rate or to exempt them from VAT:
Education
Health
Real estate
Local transport
The Member States have the right to subject the oil sector, petroleum derivatives, and gas to a zero rate of VAT.
Individual GCC countries have the right to subject certain food products to a zero rate of VAT.
The Member States have the right to subject medical supplies to a zero rate of VAT.
Intra-GCC and international transport will be subject to a zero rate of VAT.
The export of goods to jurisdictions outside of the GCC Member States will be subject to a zero rate of VAT.
The Member States have the right to exempt Financial Services from VAT. The term financial services is not defined but broadly the exemption will generally relate to dealings in money, securities, foreign exchange and the operation and management of loan accounts, deposits, trade credit facilities and related intermediary services. The exemption is not expected to extend to fee based services transacted by a financial institution. However, Member States may choose to apply different VAT treatments to financial services if they wish.
Supplies of goods and services from a VAT registered person in one Member State to a VAT registered person in another Member State are subject to the reverse charge mechanism.
VAT grouping appears to be permitted between two or more legal persons resident in the same Member State.
The treatment of GCC free zones is not addressed and it is left to each Member State to determine its own VAT treatment for free zones.
Businesses with an annual revenue of over AED 375,000 will be required to register for VAT purposes.
Businesses with an annual revenue between AED 187,500 and AED 375,000 will have the option to register for VAT purposes.
The INTERNATIONAL SALES COMMISSION AGREEMENT regulates the relations between a person or a company, Agent, which manages the sales for a company, Principal, which supplies products and which wishes to move into international markets.
This is an example template for an agency agreement under Belgian law. It should more or less comprise all elements that are recommended to be addressed, of course how they are addressed is subject to negotiation between the parties. The document therefore can serve as a guideline for the negotiations.
Note: do not commercialize this template.
Note: consider seeking legal help in using the template if you find yourself short of "legal savvy" in that area.
Transfer pricing refers to the determination of prices at which goods, services and intangible properties are transacted between related parties. When unrelated parties deal with each other, independent market forces shape the commercial pricing of such transactions. However, in transactions involving related parties, their commercial and financial relations may lead to the setting of prices that deviate from independent commercial prices.
This is an overview of transfer pricing mechanisms, providing guidelines to follow arm’s length principle and documentation to be maintained for the purpose of audits
This is an attempt to explain the broad concept of and rationale behind Transfer Pricing Regulations. Also gives a high level view of the scheme of Indian Transfer Pricing Regulations as on date. Points out the TP controversies in India. Above all gives a well spirited guidance on dealing with TP in India.
Is COVID-19 a Force Majeure Event? – Legal & Statutory PositionDVSResearchFoundatio
OBJECTIVE
In this webinar, we will understand the meaning and legal basis of a force majeure event. We shall discuss if COVID-19 will trigger a force majeure clause and whether this outbreak is considered by Indian Government as force majeure. Further, statutory relaxations announced by the Government of India in the light of COVID-19 outbreak will be discussed. Finally, the webinar will also cover the practical suggestions if force majeure event is attracted.
What is VAT ?
What is covered under VAT ?
At what rate to charge for which Items ?
When to charge ?
When to pay ?
What happens to sales returns and Bad Debts ?
What records to keep and how long to keep ?
When, how and with what information to file returns ?
What are the penalties for non-compliance ?
The standard VAT rate will be 5% unless a zero rate or exemption applies.
The Member States have the right to subject the following sectors to a zero rate or to exempt them from VAT:
Education
Health
Real estate
Local transport
The Member States have the right to subject the oil sector, petroleum derivatives, and gas to a zero rate of VAT.
Individual GCC countries have the right to subject certain food products to a zero rate of VAT.
The Member States have the right to subject medical supplies to a zero rate of VAT.
Intra-GCC and international transport will be subject to a zero rate of VAT.
The export of goods to jurisdictions outside of the GCC Member States will be subject to a zero rate of VAT.
The Member States have the right to exempt Financial Services from VAT. The term financial services is not defined but broadly the exemption will generally relate to dealings in money, securities, foreign exchange and the operation and management of loan accounts, deposits, trade credit facilities and related intermediary services. The exemption is not expected to extend to fee based services transacted by a financial institution. However, Member States may choose to apply different VAT treatments to financial services if they wish.
Supplies of goods and services from a VAT registered person in one Member State to a VAT registered person in another Member State are subject to the reverse charge mechanism.
VAT grouping appears to be permitted between two or more legal persons resident in the same Member State.
The treatment of GCC free zones is not addressed and it is left to each Member State to determine its own VAT treatment for free zones.
Businesses with an annual revenue of over AED 375,000 will be required to register for VAT purposes.
Businesses with an annual revenue between AED 187,500 and AED 375,000 will have the option to register for VAT purposes.
The INTERNATIONAL SALES COMMISSION AGREEMENT regulates the relations between a person or a company, Agent, which manages the sales for a company, Principal, which supplies products and which wishes to move into international markets.
This is an example template for an agency agreement under Belgian law. It should more or less comprise all elements that are recommended to be addressed, of course how they are addressed is subject to negotiation between the parties. The document therefore can serve as a guideline for the negotiations.
Note: do not commercialize this template.
Note: consider seeking legal help in using the template if you find yourself short of "legal savvy" in that area.
Transfer pricing refers to the determination of prices at which goods, services and intangible properties are transacted between related parties. When unrelated parties deal with each other, independent market forces shape the commercial pricing of such transactions. However, in transactions involving related parties, their commercial and financial relations may lead to the setting of prices that deviate from independent commercial prices.
This is an overview of transfer pricing mechanisms, providing guidelines to follow arm’s length principle and documentation to be maintained for the purpose of audits
A Quick Glance At Indonesia’s Revised Transfer Pricing RegulationNair and Co.
A balance between the interests of multinational companies and the tax authorities amidst the continuing instability within the global economyhas become tremendously important.
This international transfer pricing guide provides an overview of the different transfer pricing rules and regulations in key countries and details of how you can get further advice from Grant Thornton specialists who can help with:
• audit support
• documentation
• planning
• supply chain re-engineering
Transfer pricing is increasingly influencing significant changes in tax legislation around the world. This issue of Transfer Pricing News focuses on recent developments in the field of transfer pricing in Kuwait, the Netherlands and Switzerland. It also includes an interesting article on country-by-country reporting and an article from BDO Belgium about a conflict of interest between transfer pricing and customs.
This ppt describe the Definition of TP with introduction to Transfer pricing and Objectives with types of TP addressed.
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Transfer Pricing Forum: Transfer Pricing for the International Practitioner, ...Matheson Law Firm
Joe Duffy, Partner in the Tax Group, and Kathryn Stapleton, Solicitor in the Tax Department, co-wrote the Ireland section for Transfer Pricing Forum: Transfer Pricing for the International Practitioner, September 2016.
Chapter C.1 - UN TP Manual: Legal Environment for Establishing TP RegimesDVSResearchFoundatio
Key Takeaways:
Considerations in the Design
Presumptive Taxation Approaches and the Arm's Length Principle
Format of Receiving TP Information
TP Rules in National Tax Regimes
2018 Transfer Pricing Overview for the Czech RepublicAccace
Transfer pricing Transfer Pricing Czech Republicregulations deal with the determination of prices in transactions (e.g. sale of goods, provision of services or provision of loans) realized between economically or personally related companies. The aim is to ascertain that the arm’s length principle is met.
Virtual companies can conduct selected professional activities that include services related to printing and advertising; computer programming, consultancy and related activities; and design activitie
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In UAE, tobacco and tobacco products, Energy Drinks and Carbonated drinks are subject to Excise tax and the nation has now decided to levy excise tax on all e-cigarettes, e-liquids and sweetened drinks with effect from December 1, 2019
Regulation of the submission of reports by multi-national companies in UAE.pdfFiyona Nourin
The CbC report must be submitted within 12 months of the end of the reporting period. Accordingly, for the financial years commencing on 1 January 2019, the CbC report must be submitted by 31 December 2020
UAE Implements New Law to Support Financially Insolvent Individuals.pdfFiyona Nourin
The law will lead to greater transparency, in terms of civil debt repayment transactions, and will reinforce the position of the country as an ideal destination for investment, where equal rights are given to all the parties. It helps in creating an atmosphere that encourages entrepreneurship and creates favorable conditions for doing business.
Protection against the dangers of cyberspace, support for innovation in cyberspace and the growth of the emirate and its economic prosperity, are the motives of Dubai cyber security strategy.
There has been widespread scepticism and fears that the integration of emerging new technologies like AI into an industry such as HR would inevitably lead to multiple job losses
Block-chain lacks a single point of failure. In addition to being efficient, the blockchain has other unique characteristics that make it a breakthrough innovation.
A Future Economy Research Centre that will provide a platform for scientific research will be the eighth initiative and the ninth initiative is a programme that intends to consolidate the culture of entrepreneurship and inspire students to start economy companies.
VAT Errors and ways to rectify them.pdfFiyona Nourin
When a person fails to charge and account for the correct amount of output VAT or does not recover the correct amount of input tax, it is considered as an error.
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Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
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A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
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This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
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(i.e., industry structure in the language of economics).
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Transfer Pricing in UAE.pdf
1. Transfer Pricing in UAE
In the era of globalization, companies have the flexibility and ability to place
their branches or divisions, or subsidiaries anywhere in the globe and it is a
common practice to transfer goods or services from one tax jurisdiction to
another tax jurisdiction. While doing this, companies can minimize tax burden
and maximize the profit but the two tax jurisdictions must also consider
maximizing their tax revenue by making laws and regulations that govern such
transactions. In short, the transaction between related parties should be
priced in the same way as a transaction between unrelated parties.
Transfer Pricing Regulations in UAE
Transfer pricing refers to the rules and methods for pricing transactions within
and between enterprises under common ownership or control. This blog will
assist you in having an initial understanding of transfer pricing regulations.
What is Arm’s Length Price?
The arm’s length price (ALP) of a transaction between two associated
enterprises is the price that would be paid if the transactions had taken place
between two comparable independent and unrelated parties, where the
consideration is only commercial.
What will be the impact of Transfer Pricing Rules on Corporate Tax?
As per the current information from MOF (Ministry of finance), transfer pricing
rules seek to ensure that transactions between related parties are conducted
in arm’s length terms (i.e as if the transaction were conducted between
independent parties). UAE businesses will need to comply with transfer
pricing rules and documentation requirements set with reference to the OECD
Transfer Pricing Guidelines.
2. Taxpayers should apply the arm’s length principle to ensure that the
transactions between related parties reflect independent pricing. Such arm’s
length price is fairly a market price of such commodity or service in the
market.
We expect that TP regulation will be part of UAE Corporate Tax Law and it
may contain various methods of transfer pricing, vast annual transfer pricing
documentation, and harsh penalties for non-compliance.
As a general practice, Federal Tax Authority (FTA) shall make an
assessment and scrutinize the transfer pricing policies, documentation, inter-
company and inter-group transactions, etc whether transactions are
consistent with TP regulations. Business entities are subject to huge penalties
for non-compliance with Transfer Pricing regulations.
Transfer Pricing Documentation
Businesses will have to comply with transfer pricing rules and documentation
requirements set with reference to the OECD Transfer Pricing Guidelines.
Proper documentation will assist the taxpayers to show that their transactions
satisfy the arm’s length principle and hence eliminate transfer pricing disputes.
If a business entity has increased volume and complexity of international as
well as domestic transactions, it will lead to transfer pricing issues, so it will
result in a significant increase in compliance costs for taxpayers.
In this respect, it is noted that clear and widely adopted documentation rules
can reduce compliance costs that could otherwise arise in a transfer pricing
dispute. To address such issues entity should have resources including an in-
house or outsourced tax specialist who has expertise and knowledge about
transfer pricing rules and international transactions.
3. Generally, a self-declaration regarding TP rules compliances shall be
submitted along with the tax return electronically.
Why Transfer Pricing Documentation?
Ensures that taxpayers consider transfer pricing requirements in establishing the
prices and other conditions and in reporting income from such transactions in the
returns.
To provide tax administrations with the information necessary to conduct an
informed transfer pricing risk assessment.
Documentation Model under OECD Guidelines
As per the OECD guidelines on transfer pricing, authorities adopt a three-tier
approach for transfer pricing documentation consisting of:
Master file – containing standardized information for all MNE group members
Local file – material transactions of local taxpayers
Country by country report – Global allocation of the MNE groups’ income and
tax paid, indicators of the location of economic activity within the MNE group.
Local File
Business entities having related party transactions should maintain
information and documents as per the laws and regulations. The OECD
guidelines local file includes:
Local entity
Description of management structure of local entity
Detailed description of business and strategy
Key competitors
Controlled transactions
Description of material-controlled transactions and context of such transactions.
Amount of intra-group payments and receipts for each category of controlled
transactions
Identification of associated enterprises and relationships among them
Copies of all Material intercompany agreements
4. Detailed comparability and functional analysis including changes compared to
prior years
An indication of the most appropriate transfer pricing methods and reason for
selecting the method
Summary of assumptions in the selection of methods
A list and description of selected comparable uncontrolled transactions
A description of any comparability adjustments performed
Summary of financial information used in the application of selected TP
methodology
Financial information
Annual financial accounts of local entity
Information and allocation schedule showing financial data is used for TP
methodology
Summary of schedules of financial data for comparable used and their source
Country by Country Report (CbCR)
The parent company of an international group must submit the report to the
prescribed authority in its country of residence
The CbCR legislation only applies to the parent companies of multinationals
whose consolidated turnover exceeded USD 857 million(equal to or more than
AED 3.15 billion) in the previous financial year
The report is based on a consolidated financial statement group
CbCR Report should provide a breakdown of the Multinational Group’s global
revenue, profit before tax, income tax accrued, and some other indicators of
economic activities for each jurisdiction in which the MNE operates
TP Methods under OECD guidelines
The arm’s length price for a controlled transaction can be determined by
selecting and applying the most appropriate transfer pricing method. OECD
recognizes five main transfer pricing methods:
Traditional transaction method
Comparable Uncontrolled Price Method
Resale Price Method
Cost Plus Method
5. Transactional profit method
Transactional Profit Split Method
Transactional Net Margin Method
Companies should select an appropriate transfer pricing method by
considering several factors like availability of information, strength, and
weakness of the transfer pricing method appropriateness of the method in
giving nature of transactions, etc. Once the transfer pricing method and
reliable comparable are found, an arm’s length range can be calculated.
The regulations may also provide an option to use methods other than
approved Transfer Pricing Methods as above, provided that the Taxable
Person can demonstrate a reliable measure of an Arm’s-Length price and
documentation, and the suggested method satisfies the required provisions
under UAE CT law.
Illustration
A general example of the application of the Comparable Uncontrollable Price
Method
ABC Ltd and XYZ Ltd are related persons who form part of the same
multinational national entity.
ABC Ltd sells goods to XYZ Ltd at AED 10,000/MT
ABC Ltd sells the same type of goods to LMN Ltd (independent party) and
charges AED 12,000/MT (inclusive of transport charges of AED 1000).
6. 1. In this case, AED 12000 per MT charged for the sale of goods doesn’t
satisfy the arm’s length principle, so comparability adjustments should be
made
2. When a potential comparable transaction is identified and if one or more
material differences are affecting the price then, comparability adjustments
can possibly neutralize the effect.
3. Comparability adjustments may include the effect of quantity discounts,
delivery terms, contractual terms, and minor product difference
4. In this case, controlled transactions can be adjusted based on internal
comparables. So, transfer price can be treated as AED 11,000 per MT
(12,000-1,000). As a result, the profit of ABC Ltd will be increased by AED
1000, and the same will be considered during the computation of tax
liability.
7. Disclaimer: This Blog is based on the FAQ published by MOF (Ministry of
Finance), OECD Guidelines on Transfer pricing and coupled with generally
accepted practices in these jurisdictions.
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