Technoglitch
Core Member
In a major relief to British telecom major Vodafone in the transfer pricing case, the Bombay High Court on Thursday ruled in its favour, setting aside a tax demand of Rs. 3,700 crore imposed on Vodafone India by the income tax authorities. This is likely to benefit multinational companies such as IBM, Royal Dutch Shell and Nokia that face similar tax demands.
The case dates back to financial year 2007-8 involving the sale of Vodafone India Services Private Ltd., the call centre business of Vodafone, to Hutchison, and the tax authorities demanded capital gain tax for this transaction. The Income Tax department had demanded that Rs.8,500 crore be added to the company’s taxable income.
Transfer pricing is referred to the setting of the price for goods and services sold between related legal entities within an enterprise. This is to ensure fair pricing of the asset transferred. For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price.
Vodafone wins transfer pricing tax dispute case - The Hindu
The case dates back to financial year 2007-8 involving the sale of Vodafone India Services Private Ltd., the call centre business of Vodafone, to Hutchison, and the tax authorities demanded capital gain tax for this transaction. The Income Tax department had demanded that Rs.8,500 crore be added to the company’s taxable income.
Transfer pricing is referred to the setting of the price for goods and services sold between related legal entities within an enterprise. This is to ensure fair pricing of the asset transferred. For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price.
Vodafone wins transfer pricing tax dispute case - The Hindu
