Ruling on Samsung India Boosts Business View on Transfer Pricing

A recent court ruling in favor of Samsung India Electronics Pvt. Ltd. bolsters the stance of companies in India that contend they aren’t subject to taxes for all of their marketing expenses under transfer pricing laws.

The ruling reiterates business-favorable court positions in a longstanding tussle between tax authorities and Indian units of multinational companies. The issue focuses on whether companies’ advertising, marketing, and promotion, or AMP, expenses should be considered international transactions and thus subject to the arm’s-length rules under transfer pricing.

Despite the similarly favorable rulings in other AMP cases, hundreds of companies in India have ongoing disputes ...