School of Law, Christ University, Barigalore, Karnataka
Albert Einstein is known to have admitted and stated that "the hardest thing to understand in the world is income tax." This was stated about more than 50 years, even before the globalization created an increase in the cross border economic-fiscal relationships. With the coming of globalization, it has made the navigation of the tax even more complex and equally difficult to understand the arrangements between the domestic and international tax. Recent transfer pricing review in India has subsequently resulted in the significant demands in tax, time consuming litigation and tax payer ambiguity and hesitation. This paper will initially analyze both domestic and intemational law relating to transfer pricing. The second part will deal with the applicability of the safe harbor rules and alternative dispute mechanism in India with comparison to other countries and, finally, the paper will deal with the possible challenges and their solutions.
