New Transfer Pricing Regime in Information Technology Sector

in “Transformation Through Strategic and Technological Interventions” Book of (NICOM 2018), Eds., Balakrishnan Unny R., Nityesh Bhatt, & Shahir Bhatt, McGraw Hill Education (India) Pvt. Ltd. for Institute of Management, Nirma University, Ahmedabad, ISBN-13: 978-93-87572-21-8 & ISBN-10:93-87572-21-8

10 Pages Posted: 2 Mar 2018

See all articles by Pawan K. Chugan

Pawan K. Chugan

Nirma University - Institute of Management

Nishant Agrawal

Nirma University - Institute of Management

Date Written: January 11, 2018

Abstract

The Transfer pricing rules in India which were first introduce, in the year 2001 have been regularly modified and updated and presently with the inclusion of APA and SHR system we are having the new transfer pricing regime the rules of which are at the par with most of the advance counties the world over. Thus, we have new transfer pricing regime which is not only directed to reduce litigations between the tax departments and multinationals but also playing catalytic role in inviting more FDI into the country. These rules are applicable both tangible and intangibles. This paper, however, makes an attempt to examine how new transfer pricing will be applicable to intangible services pertaining to the information technology sector such as BPO, KPO, ITeS, etc. In this context, the paper first discusses some of the basic concepts and then examine the applicability of APA vis-a-vis SHR as the alternative approaches to be adopted by the MNCs operating in the area of Information technology.

Note: This paper was presented at the 21st Nirma International Conference on Management (NICOM 2018) on the theme of “Societal and Organisational Transformation Through Strategic and Technological Interventions” organized by the Institute of Management, Nirma University (IMNU), Ahmedabad, India during Jan. 11-13, 2018. Paper is uploaded with the permission of IMNU and its contents may be cited with its source for academic purpose such as the brief quotations embodied in critical reviews and certain other non-commercial uses as permitted by copyright law. However, the copyright of this paper remains with (IMNU) and its permission is necessary for any commercial use.

Keywords: Transfer Pricing, Advance Pricing Agreement, Safe Harbour Rules, Information Technology, Taxpayer, MNCs, Intangible Services

JEL Classification: E62, F21, F23, H2, H32, H87

Suggested Citation

Chugan, Pawan Kumar and Agrawal, Nishant, New Transfer Pricing Regime in Information Technology Sector (January 11, 2018). in “Transformation Through Strategic and Technological Interventions” Book of (NICOM 2018), Eds., Balakrishnan Unny R., Nityesh Bhatt, & Shahir Bhatt, McGraw Hill Education (India) Pvt. Ltd. for Institute of Management, Nirma University, Ahmedabad, ISBN-13: 978-93-87572-21-8 & ISBN-10:93-87572-21-8. Available at SSRN: https://ssrn.com/abstract=3123668

Pawan Kumar Chugan (Contact Author)

Nirma University - Institute of Management ( email )

Sarkhej Gandhinagar Highway
Ahmedabad, Gujarat 382481
India
+912717241900 (Phone)
+912717241916 (Fax)

Nishant Agrawal

Nirma University - Institute of Management ( email )

Sarkhej-Gandhinagar Highway
Chandlodia, Via : Gota
Ahmedabad, GA Gujarat 382 481
India

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