Transfer pricing is the price at which two companies that are related transfer goods or services to each other. In an era of globalization where companies have a sprawling web of subsidiaries peppered across the world, such transactions between related parties are quite common. Almost every country has now established regulations around transfer pricing when it comes to these entities. India too has an official transfer pricing rule that came into effect in 2001. By 2012, there were 3,500 transfer pricing cases stuck in a dispute.
The Indian Tax Authorities ‘surveyed’ BBC last week. They wanted a peek into some transactions they found suspicious. And one of the allegations apparently levelled against the British media house is that it flouted something called the ‘transfer pricing’ regulations. So in today’s episode for 22nd February 2023, we thought we’d explain a bit about this specific part of the tax world today.