India has highest transfer pricing cases

NEW DELHI: India has the highest number of litigations over transfer pricing, where MNCs have been charged of reducing their tax liability by transferring profits to group companies abroad, E&Y said in a survey.

The country has over 1,500 cases pending under the transfer pricing, it said.

The survey included 877 MNCs from 25 countries. A large number companies are accused of selling goods and services to their subsidiaries at inflated prices under transfer pricing, to reduce profits and hence tax liabilities.

The law requires that goods and services should be sold to subsidiary companies at arm's length price-the price at which goods are traded between unconnected companies.