Clause 105 - Computation of income from international transaction having regard to arm's length price

Clause 105 of Direct Taxes Code Bill, 2009: Income from international transactions must be based on arm's length price.

The Direct Taxes Code Bill, 2009, Clause 105, addresses the computation of income from international transactions based on the arm's length price. It mandates that income or expenses from such transactions be determined with reference to this price. The allocation or apportionment of costs or expenses for benefits, services, or facilities provided to associated enterprises must also consider the arm's length price if there is a mutual agreement between enterprises. However, these provisions do not apply if the determination results in reduced taxable income or increased losses based on the financial records of the relevant year.