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The domestic exemption under the CIT Act allows taxpayers to refrain from preparing transfer pricing documentation if the parties to the transaction did not incur a tax loss in the source of income to which the transaction relates. A loss in another source (e.g. capital gains) does not exclude the exemption. The exemption applies only to documentation obligations – it does not relieve the taxpayer from applying arm’s length prices or from TPR reporting. The key is the correct allocation of the transaction to the relevant source of income and the analysis of the tax result within that source.

As we approach 2025, multinational corporations are entering a new phase of transfer pricing compliance, characterized by stricter regulations and significantly shorter deadlines. Countries worldwide, led by Germany, are tightening their transfer pricing rules, requiring companies to accelerate documentation processes and enhance compliance efforts.

The 2024 Transfer Pricing OECD Guidelines are essential for multinational enterprises to ensure fair taxation and compliance. This article breaks down the core principles and steps needed for compliance, helping companies avoid double taxation and improper profit shifting.

Transfer pricing is used to set prices for transactions between related entities within a multinational corporation. It’s essential for managing tax liabilities and maintaining compliance with international tax laws. In this article, we’ll explore the basics of transfer pricing, its methods, regulations, documentation requirements, and strategic benefits.

Transfer pricing can be challenging for multinational enterprises, but the Transactional Net Margin Method (TNMM) offers a practical and widely accepted solution. As one of the five OECD-approved transfer pricing methods, TNMM has become increasingly popular among tax authorities and businesses worldwide due to its flexibility and reliability in establishing arm's length pricing.

Transfer pricing methods are the backbone of multinational tax compliance. They dictate how profits are allocated across jurisdictions and ensure that companies adhere to the arm’s length principle—treating related-party transactions as if they were between independent parties.