ICAI issues Revised 2022 edition of Guidance Note on Report u/s 92E of IT Act 1961

Introduction Legislative Framework 1.1 In an era of liberalization and globalization of trade and investment and the emergence of digital economy, the perceptible results have been – increase in the number of cross-border transactions and the complexity and speed with which global business can be transacted.

1.2 When transactions are entered into between independent enterprises, the consideration therefore is determined by market forces. However, when associated enterprises deal with each other, it is possible that the commercial and financial aspects of the transactions are not influenced by external market forces but are determined based on internal factors. In such a situation, when the transfer price agreed between the associated enterprises does not reflect market forces and the arm’s length principle, the profit arising from the transactions, the consequent tax liabilities of the associated enterprises and the tax revenue of the host countries could be distorted.

1.3 The existence of different tax rates and rules in different countries offers a potential incentive to multinational enterprises to manipulate their transfer prices to recognise lower profit in countries with higher tax rates and vice versa. This can reduce the aggregate tax payable by the multinational groups and increase the after tax returns available for distribution to shareholders.

2 thoughts on “ICAI issues Revised 2022 edition of Guidance Note on Report u/s 92E of IT Act 1961”

  1. I Sudip Mukherjee,AT of Guti Udaychand Vidyamandir(HS)School,Hooghly Dist.West Bengal,PAN NO.AFGPM9053G don’t receive refund money amounting ₹12666/=for the F.Y.2021-22.Please,look over the matter.

  2. Also LIC of India, Tarakeswar Br.at the time of maturity 8976/=Tax deducted from maturity value which is fully illegal.That very refund also pending.Please,look over the matter.Case of Mrs.Sima Mukherjee,PAN NO.BEMPM4029G for the financial year 2021-22

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