A little line at the end of every contract or agreement asks you to sign and put a place and date of signing. Most people rarely pay attention to the location. But it can have far reaching consequences.
Tax administrators world over, as also OECD, have come to realise the inherent limitations of traditional transaction methods and in the process Transactional Profit Methods have gained greater acceptance than before. This is evident from the suggested amendments in ‘Transfer Pricing Guidelines for Multinational Enterprises and tax Administrators’ issued by OECD in 1995. They are no longer transfer pricing methods of last resort.
The article deals with the problems/limitations of taxing transactions entered into over internet that, specially the ones that cut across national boundaries.
