The challenges with the profit split method
18 January 2012
Vijay Iyer of Ernst & Young seeks to discuss some aspects of the profit split method (PSM) in Indian, situations in which PSM can be applied, and the approach and challenges in the application of PSM.
The progress and development of the Indian economy over the
past two decades has attracted many multinational enterprises
(MNEs) to knock at its shores and explore the resources and the
market that it has to offer. Consequently, among other things,
this has propelled the Indian tax administration into the
limelight, with MNEs expressing their need to become familiar
with the significant and relevant aspects of Indian tax law and
practice. Ernst & Young's 2010 survey of MNEs on
international tax matters demonstrated that more respondents
identified transfer pricing as the most important tax issue
they face globally as well as in India.
|The OECD has clearly
defined the profit split method
In general terms, transfer pricing methods look to apply the
arm's-length principle as a means to evaluate whether the
profits earned by a MNE is what a third party would have earned
by transacting with another...
This article is locked content, available to current subscribers or trialists.
- Current subscribers or trialists - Please log in to view this article in full.
- New users - Please take a free 7 day trial.
- Expired subscribers or trialists - Please subscribe to gain immediate full access.
If you think you've received this message in error, please contact your account manager, Nick Burroughs:
Email: email@example.com, Tel: +44 (0)207 779 8379
Subscribe today to gain full access to International Tax Review.
Take a free trial now and gain 7 days of full access to International Tax Review.