Contract R&D service characterization: factors determining whether development centres bear insignificant risk and TNMM applicability. Guidance identifies contract R&D service providers with insignificant risk by reference to whether the foreign principal performs economically significant functions (including conceptualization, design and strategic direction), provides funds and economically significant assets and remunerates the Indian centre, actually controls and supervises core activities, and whether the Indian centre lacks ownership rights and does not assume economically significant realized risks; it also presumes a rebuttable absence of risk control where the principal is in a widely perceived low or no tax jurisdiction and directs revenue officers to decide based on conduct and totality of facts while selecting the most appropriate transfer pricing method.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Contract R&D service characterization: factors determining whether development centres bear insignificant risk and TNMM applicability.
Guidance identifies contract R&D service providers with insignificant risk by reference to whether the foreign principal performs economically significant functions (including conceptualization, design and strategic direction), provides funds and economically significant assets and remunerates the Indian centre, actually controls and supervises core activities, and whether the Indian centre lacks ownership rights and does not assume economically significant realized risks; it also presumes a rebuttable absence of risk control where the principal is in a widely perceived low or no tax jurisdiction and directs revenue officers to decide based on conduct and totality of facts while selecting the most appropriate transfer pricing method.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
TaxTMI 
