Transfer Pricing : Draft Safe harbour rules
The Central Board of Direct Taxes (CBDT) has notified the draft safe harbour rules. The rules are applicable for the following: -
- Two AYs beginning from 2013-14
- IT, IT-enabled & KPO services up to Rs 100 cr.
- Operating Profit margin of at least 20% for IT, IT-enabled and 30% for KPO.
- Intra group loans on which interest rate is more than a certain limit over SBI base rate
- Corporate guarantee of up to Rs 100 crores where commission is at least 2%
- Contract research relating to software development with margin of at least 30%
- Contract research relating to software development with margin of at least 29%
- Core auto components with operating margin of 12% or more
- Non-core auto components of operating margin of 8.5% or more.
- For Intra-group loan upto Rs 50 crores, SBI base rate plus 150 bps
- For Intra-group loan above Rs 50 crores, SBI base rate plus 300 bps.