Tax Policy and FDI Influence of Transfer Pricing

Tax Policy and FDI Influence of Transfer Pricing
FOREWORD BY M.C. JOSHI (Chairman) Central Board of Direct Taxes Ministry of Finance


By  Ganapati Bhat

ISBN No.: 9789380574288

Pages: xvi+345p

Edition: 2012 (Hardback)

Price: Rs 995.00


About The Book

Hall mark of Globalization is the emergence and dominance of Multinational Corporations(MNCs). Foreign Direct Investment (FDI) implies minimum two entities-mostly incorporated- situated in two different nations. The transactions between these entities that are having common control and management of running of these entities give rise to the question of how to decide the price of commercial transactions between them, since they are not happening in an open market but occurring within the same group. This is the issue of transfer pricing. Tax differentials between two tax jurisdictions are expected to cause transfer pricing manipulations resulting into profit shifting from high tax jurisdiction to low tax jurisdiction.
Tax policy of a Government can affect the pre-investment decision of an enterprise about the locational choice as well as post investment decision of the investor as to where to show the profit; either in the host country or in home country or in some other country if the foreign direct investor has establishments in more than two countries. Therefore Tax Policy, FDI and Transfer Pricing are closely connected issues. This book analyses the linkages between these concepts theoretically as well as empirically using primary as well as secondary data. India is actively promoting FDI. This book also examines the performance of FDI in India and how and why it is distributed across different states. The legislative and administrative measures used by Government of India and the prevalent legal and governmental practices followed by other Nations to protect the revenue base and the short comings of these measures are discussed in this book.

About the Author

Ganapati Bhat hails form Karnataka and has done his Masters in Economics from Gokhale Institute of Politics Economics, Pune. He is an Indian Revenue Service Officer from the 1989 Batch of Civil Service and has worked in various capacities in Government of India and Income Tax Department. He was on deputation to Research and Information System for Developing Countries, a Delhi based Think Tank and participant in the Managing Global Governance Programme at Bonn, Germany. He is awarded Ph.D for his thesis titled ' Tax Policy, Transfer Pricing And Foreign Direct Investment: The case of India' by Department Of Economics Jamia Millia Islamia (A Central University),New Delhi in 2010. He has specialized in the area of Transfer Pricing Law. Presently he is working as Commissioner of Income Tax at Delhi.