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Defending losses for the Indian ITES arm of a leading American company

Engagement: Defending losses incurred by the taxpayer as against cost plus 24% proposed to be used as benchmark by the Indian tax authorities


Solution

  • No transfer pricing adjustment – significant departure from practice generally followed by Indian authorities
  • Huge tax savings for the client
     

Value Delivered

  • Split Profit and Loss Account
  • Losses from associates vs third parties
  • Economic Profit and Loss Account
  • Adjustments on account of start-up cost, idle capacity, training period, risk differential, etc.
  • Trend analysis of pricing policy and profitability for 4 years