Taxing transfer pricing isn't as simple as some make out

Foreigners must be in awe of the abilities of the Indian government, particularly its uncanny ability to identify transactions that it believes it must tax. In recent weeks, several controversial transfer pricing tax assessments have hit the headlines. Transfer pricing orders have hitherto concentrated on revenue items such as advertising and marketing expenses. Last year, however, one of the key items was differentials in the interest rates of inter-corporate loans. Reportedly, that has this year led to additional trouble.

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