International Taxation & Transfer Pricing Domain -
Frequently Asked Technical Interview Questions

      Average CTC: 8 to 13 LPA (approx.)

     Technical Questions :

• What is transfer pricing and why is it used?.
• Why do you think India decided to introduce transfer pricing?
• State a few examples of International transactions subject to transfer pricing
• What documents are required to be maintained by a company while executing an international transaction
• When companies are called ‘associated enterprises?
• Are domestic transactions also covered in transfer pricing?
• What documents are required to be maintained by a company while executing an international transaction
• How does a person determine that an inter-company transaction is at arm’s length? Section 92F defines Arm’s Length Price is the price applied (or proposed to be applied) when two unrelated persons enter into a transaction in uncontrolled conditions. Unrelated Persons, Section 92A, the persons said to be unrelated if they are not associated or deemed to be associated with enterprise. Uncontrolled Conditions are that conditions are not controlled or suppressed or molded for the achievement of predetermined results.

     Method of Computation of Arm’s Length Price :

   Section 92C Arm’s Length Price can be computed by the following methods;

  1. Comparable Uncontrolled Price Method - This method is applied where there are similar transaction(s) between unconnected parties 

  2. Resale Price Method - This method is applied where item obtained from AE is resold to unrelated party

  3. Cost Plus Method -This method is generally applied where semi-finished goods are sold to AEs 

  4. Profit Split Method - This method is applied where there is transfer of unique intangibles or in multiple International Transaction 

  5. Transaction Net Margin Method - Compute Net Profit (NP) margin of the enterprise from International Transaction with AE having regard to cost incurred/sales     effected/assets employed 6. Such other   methods as may be prescribed by the board

• Indian company becomes an associate of a non-resident in the last quarter of the previous year. Do the transfer pricing rules apply for the year? If it does, does it apply for the quarter or the whole year?
• Which tax can be charged by the Indian Govt. from Facebook and at what rate?
• Do the transfer pricing rules apply in respect of transactions between the head office and the branch?
• What are the sources of origin of International Tax Law?
• What are the different types of methods which can be applied for computing arm’s length price? Who is the authorized person to furnish the report under section 92E of the Transfer Pricing Regulation Act?
• Is there a statutory deadline for the submission of transfer pricing documentation?
• What is Double Taxation Relief? What are the major ways (methods) in which relief from double taxation is provided?
• What is covered under the scope of Undisclosed Foreign Income and Asset/Undisclosed asset located outside India under the Black Money (Undisclosed Foreign and Assets) and Imposition of Tax Act, 2015?
• Explain the role of Multilateral Instrument (MLI) under the BEPS
• What are the General Anti-Avoidance Rules (GAAR)? And when these are applicable?
• Explain whether the double taxation avoidance treaties entered into by the Govt. of India override domestic laws.
• What is an Impermissible Avoidance Agreement (IAA)? Also, explain twin conditions (Primary condition & Tainted element presence Test) that need to be satisfied for an agreement to be termed as IAA.
• What do you understand by the term foreign tax credit? How is it computed?
• How Business Process Outsourcing (BPO) units are taxed in India?
• Can a person resident in India seek an advance ruling from the Authority for Advance Ruling? On whom such an advance ruling shall be binding?
• What is the Safe Harbour Rule?
• What is an Advance Pricing Agreement (APA)?
• What is meant by ‘International Transaction’ with regard to Transfer Pricing Outline?