Transfer Pricing

How many types transfer pricing methods are used in India?

• 6

• 5

• 4

• 7

Computation of Arms-Lenght Price in case of 7 or more companies

• Weighted Average Mean

• Simple Arithmetic Mean

What is the primary purpose of transfer pricing regulations?

• To increase company profits

• To ensure fair market value

• To minimize tax liabilities

Which of the following is NOT a method of transfer pricing recognized in India?

• Comparable Uncontrolled Price Method

• Cost Plus Method

• Market Share Method

How can transfer pricing be used for tax optimization?

• By outsourcing production to higher tax jurisdictions

• By manipulating prices between related entities to shift profits to lower tax jurisdictions.

• By increasing prices to reduce profits

• By donating profits to charity organizations

What are the potential risks of transfer pricing manipulation?

• Currency exchange rates, market competition, industry regulations

• Tax evasion, profit shifting, regulatory penalties, reputational damage, legal consequences