Transfer Pricing In India On IPR Licensing: Ensuring Fairness And Compliance

Overall, by effectively showcasing the value and impact of the licensed IPR on the company's operations and growth in the Indian market, companies can increase their chances of successfully negotiating a more favorable tax arrangement with the authorities.

Transfer pricing in India on the licensing of Intellectual Property Rights (IPR) is now a hotly discussed issue. Advanced technological developed countries are allowing license their intellectual property rights to rapidly growing countries like India to market their innovation in exchange of license fees or royalties. However, India being a source country for royalty income of licensor is equally keen to tax such royalty payments. Further, India also wants to ensure that royalty payments are at arm's length in case they are being paid to a related party.