Session on
Domestic Transfer Pricing &
M&A and Tax Structuring of Closely held Indian Companies
Wednesday, 6 February 2013 : CII NR Headquarters, Chandigarh
I am pleased to inform you that CII Chandigarh Council is organising a Session on Domestic Transfer Pricing & M&A and Tax Structuring of Closely held Indian Companies from 1515 (Registration) – 1730 hrs on Wednesday, 6 February 2013 at CII NR Headquarters, Sector 31-A, Chandigarh. The session would be conducted by eminent speakers from KPMG.
Domestic Transfer Pricing:
Taking a lead from the suggestions of the Supreme Court in the “Glaxo Smithkline Asia” case, the Finance Act 2012 extended the applicability of transfer pricing provisions to “Specified Domestic Transactions”. Taking effect from assessment year 2013-14, these provisions will cover various domestic transactions between related parties in relation to incomes / expenses of tax holiday units under Chapter VI-C, units in Special Economic Zones eligible under section 10AA of the Act, etc. as well as payments (expenditures) to specified related parties under section 40A(2)(b) of the Act. This amendment presents its own set of challenges not only as regards the scope of the provisions, but also as to the manner in which transfer pricing principles will be applied in a domestic transaction scenario. This presents another area for taxpayer to take proactive approach in ensuring additional compliances, maintaining consistency between transfer pricing policies and taking necessary risk mitigation steps.
M&A and Tax Structuring of Closely Held Indian Companies:
Most of the business houses especially in North India, especially those in the mid market segments are closely held. With the growth in the economy, and growing aspirations of the young generations, many times it becomes imperative to have a clear ownership structure that not only provides transparency to external stakeholders, but also ensures minimal impact on business owing to any change in the dynamics of the family relations/ ownership levels. A ‘Closely Held Company’ exercise typically involves creating a roadmap to achieve a structure for owning the family wealth etc., which is designed to stay across generations, can be used for raising growth capital for promoter owned business, development of new business to meet the aspirations of young minds, and facilitates mechanism for settlement of unforeseen differences amongst closely held business enterprises. This provides a clear transparent structure through which the desires of owners can be achieved through the Wealth created by them, be it in terms of continuity of self created business, meeting charitable desires amongst several others.