Transfer Pricing

Unique/Typical Transactions

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Chapter 10
Unique/Typical Transactions


Each Industry has its unique way of doing business, which inherently gives rise to unique transactions. There are few key transactions between associate enterprises which are not industry specific and are the subject matter of high importance for both, taxpayers and revenue authorities.
Some examples of such transactions are as under:
• Intra-group/centralised services
These are performed at Group Headquarters/by Centralised entity on behalf of Group entities eg. Accounting, legal, payroll, procurements etc.
• Cash Pooling
These are jointly undertaken to achieve better liquidity management.
• Cost Contribution Arrangements
Here the entities come together to jointly develop, produce or procure assets, sevices or rights.
• Transfer/Right to use intangibles
These are generally the ones relating to transfer/use of know-how, brand name, marketing intangibles, etc. At times, valuable intangibles include self-generated ones eg. Customer/Client list.
• Business Restructuring
These again arise on account of change in business models. For eg. A full-fledged manufacturer may convert itself to a group contract manufacturer or vice-versa.
• Group synergies/implicit support
Here the Group entities enjoy implicit support of the parent entity in various forms e.g. Parent credit rating.
• Secondment
These are unique as they may lead to taxing rights to the seconded jurisdiction and thereby triggering TP implications.

From TP's perspective, each of the above needs to be addressed in its own way. For eg., generally, payments for intra-group services are disallowed if the same fall within the Parental support category.


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