Indian advisers anxious about transfer pricing under the DTC
June 23, 2010
The Indian government has released a revised discussion paper on the controversial Direct Tax Code (DTC) containing several provisions that will affect transfer pricing.
Under the Indian Company Law, it takes at least a 26% voting power to veto special resolutions. This constitutes the minimum shareholding that would be required for a company to exercise control over another. The first version of the DTC planned to lower this trigger to 10% causing concerns that companies that are unable to exercise control, and consequently influence pricing arrangements would come under under the ambit of the transfer pricing provisions. The new revised draft does not alter this, which has disappointed advisers.
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