Transfer Pricing in Mergers & Acquisitions – Strategies for Ensuring Compliance & Maximizing Value

CA Pawan Singh – [2023] 150 taxmann.com 205 (Article)

Mergers and acquisitions (M&A) have become a common practice in the corporate world, with companies seeking to expand their businesses, acquire new technology or talent, or simply gain a competitive edge. However, M&A transactions often involve complex financial arrangements, including transfer pricing, which can have significant tax implications for the companies involved.

Transfer pricing (TP) is an often overlooked and lightly treated aspect of the tax due diligence during the M&A process. However, given that the integration of the target company is often part of the post-merger proceedings, clarifying the TP policies of both buyer and seller, and getting clarity on risks and opportunities should be considered a necessity as early as possible.

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