COST ACCOUNTING
TRANSFER PRICING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The following are the legal bases governing Transfer Pricing, except:
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Article 2 paragraph 2 of the VAT Law
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Article 18 paragraph 4 of the PPh Law
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Article 9 P3B
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Article 5 P3B
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Explanation:
Detailed explanation-1: -3CEB. Particulars relating to international transactions and specified domestic transactions required. to be furnished under section 92E of the Income-tax Act, 1961.
Detailed explanation-2: -A transfer price is based on market prices in charging another division, subsidiary, or holding company for services rendered. Companies use transfer pricing to reduce the overall tax burden of the parent company.
Detailed explanation-3: -The Organisation for Economic Co-operation and Development (OECD) outlines five main transfer pricing methods that MNEs and tax administrations can use. We explore the five methods, giving examples for each, to help organizations decide which is most appropriate for their needs.
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