To simplify the process, various methods are provided under Income Tax Act for computation of Arm’s Length Price (“ALP”) and the Transactional Net Margin Method (“TNMM”) is one of such methods. This article will offer you a brief insight into what the Transactional Net Margin Method is, what is its applicability, what are the Indian regulations for it when to use it, and what are its strengths and weaknesses.
Every country is regulated by its own International Tax rules & Regulations. Due to globalisation, the integration and cross-border transactions with the foreign countries are increasing. DTAA has entered into the International Taxation issues to intensify the cross-border financial transactions. This issue of taxability of same income in multiple countries can be diminished in many methodical ways, one of the effective methods is a tax agreement between the countries.
We at VJM & Associates LLP offer DTAA advisory and tax compliance services to both Indian & Multinational Clients. And provide tax management services to NRIs too, by following the jurisdiction of the Indian laws and regulations along with overseas countries & Double Taxation Avoidance Agreements (DTAA).