Find the lowest profit margin

If transactions have taken place between independent enterprises, due consideration shall be determined by market forces. tax rates and different rules in different countries offers the opportunity to encourage multinational companies to manipulate their transfer prices to find the lowest profit margin in a higher tax rate and vice versa. This may reduce the total taxes paid by corporations and add to the tax returns for distribution to shareholders.

In accordance with international sales, the Finance Act 2001 introduced a transfer pricing provisions of the Income Tax Act, 1961, Chapter X, Sections 92 and 92F. § 92 Department of Finance Act 2002 provides that all revenues are in international trade or international trade are just leaving the reimbursement of costs or interest to the international trade is determined by taking into account the normal price. The term “related company” is defined in Section 92A act. Under subsection (1), a company that deals directly or indirectly by one or more intermediaries, the management, control or capital of another company feels connected to the company.
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