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India gets tough on taxation of transfers within MNCs

(Reuters) – India is aggressively pursuing tax claims against multinational firms operating in the country as the government seeks to rein in its budget deficit, taking particular aim at IT and back-office functions, tax officials say. It has targeted several multinational companies in recent years for tax audits on transfer-pricing, but over the past 12 months has widened the scope of the investigations, tax officials said. Authorities are now checking deals involving more than three dozen companies, focusing on transactions worth at least 250 million rupees, officials said. Having just issued claims for the financial year to March 2009, it has shifted focus to 2009/2010. Transfer pricing is the value at which companies trade products, services or assets between units across borders, a regular part of doing business for a multinational. Revenue authorities in many countries including Britain, France, Germany and the United States are increasingly challenging efforts of companies to minimise tax liabilities by moving taxable income from higher-taxing jurisdictions to lower-tax ones. More…

News selected by Covalence | Country: India | Company: Shell, LG Electronics, Accenture, Bank of America, Microsoft, Vodafone, Ascendas, Capgemini, Kraft Foods  | Source: Reuters

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