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Transfer pricing rules recognize that it may be inappropriate for a component of an enterprise performing such services for another component to earn a profit on such services. Testing of prices charged in such case may be referred to a cost of services or services cost method. [66]
The setting of the amount of related party charges is commonly referred to as transfer pricing. Many jurisdictions have become sensitive to the potential for shifting profits with transfer pricing, and have adopted rules regulating setting or testing of prices or allowance of deductions or inclusion of income for related party transactions.
However, Belgian CFC legislation is obsolete in practice given that the application of Belgian transfer pricing rules (i.e. article 185, § 2 of the Belgian Income Tax Code, allowing the Belgian tax authorities to implement an upwards adjustment of the profits in case of a breach of the arm's length principle) take precedence over CFC legislation.
To ensure that these transactions are priced according to the arm's length principle, many countries tax authorities have implemented transfer pricing rules. Countries with specific rules on transfer pricing are less attractive from a corporate perspective because they provide less scope for profit shifting. [2]
• two interlocking domestic rules (together the Global anti-Base Erosion Rules (GloBE) rules): (i) an Income Inclusion Rule (IIR), which imposes top-up tax on a parent entity in respect of the low taxed income of a constituent entity; and (ii) an Undertaxed Payment Rule (UTPR), which denies deductions or requires an equivalent adjustment to ...
A key issue in corporate tax is the setting of prices charged by related parties for goods, services or the use of property. Many jurisdictions have guidelines on transfer pricing which allow tax authorities to adjust transfer prices used. Such adjustments may apply in both an international and a domestic context.
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On 8 March 2017, the government of India imposed anti-dumping duty ranging from US$6.30 to US$351.72 per tonne on imports of jute and its products from Bangladesh and Nepal. [28] Later the government of India withdrew the anti-dumping duty in case of Nepal. On 26 October 2017, India imposed anti-dumping duty on stainless steel from US, EU and ...