Cyient Limited issued bank guarantees to related parties, and the Indian tax authority applied a 1.90% arm's length guarantee fee based on bank rates, resulting in additional taxable income. The Income Tax Appellate Tribunal reduced the fee to 0.53%, finding that corporate guarantee fees should be significantly lower than external commercial borrowing rates. Letters of comfort were treated as equivalent to corporate guarantees and subject to the same reduced benchmark ... Read more

A Portuguese software company applied the TNMM with a 4.1% return on total cost for intra-group services, within the benchmarked arm's length range of 3.4% to 13%. The tax authority added employee bonuses to the cost base, raising additional taxable profit. The CAAD arbitration tribunal ruled in favour of the taxpayer in 2024, finding the authority had not demonstrated a deviation from the arm's length principle and annulled the assessment ... Read more

ST Microelectronics Pvt. Ltd., an Indian subsidiary providing integrated circuit design and software development services to group companies, was assessed by the Transfer Pricing Officer who selected 13 comparables and computed a margin of 23.20%, resulting in a significant adjustment. The Income Tax Appellate Tribunal ruled in favour of the taxpayer in September 2020, upholding the arm's length nature of the transactions benchmarked using TNMM ... Read more