A nudge for foreign costo step up GCC play
Bengaluru: Streamlining international taxation and expansion of safe harbour rules for Global Capability Centres (GCCs) in India will stimulate growth of the sector that is projected to cross $100 billion in revenues by 2030, said industry experts.
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Transfer pricing process is set to get a thrust following the budget announcement of adopting a block-period approach of three years for arm's length tax pricing. This will provide greater regulatory certainty and reduce litigation-one of the longest pending and most sticky issues for multinationals concerning their technology captive centres in India, the experts said.
«This measure is about ease of doing business. There is an enormous amount of time spent going back and forth on the taxation to arrive at a rate. Now, with this arrangement, there is a little bit of certainty for at least three years...,» said Rajesh Nambiar, president of tech industry body Nasscom.
The budget measure essentially will allow GCCs to arrive at a transfer pricing rate in the first year through an internal assessment, which will continue for the next two years, giving relief to potential disputes between MNCs and the government in finalising a rate.
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