Articleship assessment test ICAI – Level 2 | International Tax MCQ – Transfer Pricing

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Articleship assessment test ICAI – MCQ

Question 1:- 

The purpose of transfer pricing was to ensure that the profit of a non-tax holiday segment were not –

(a) Overstated

(b) Understated

(c) A or B

(d) Neither A nor B




Question 2:- 

Case Study

X Ltd. operates in Country A, wherein the tax rates are 30%. It intends to sell goods costing USD 100 to a customer in Country B for USD 150. To save taxes, X Ltd. incorporated a subsidiary in Country Y, namely Subsidiary C, where tax rate is 10% and sold the goods to C for USD 125, which in turn, sold the goods to buyer in Country B for USD 150.

In such a case, tax will be: –

(a) USD15

(b) USD 10

(c) USD 5

(d) None of the above

Question 3:- 

Transfer pricing is, arriving at of the price for goods and services, which are transacted between

(a) Controlled legal entities within an enterprise

(b) Independent entities within an enterprise

(c) Both A and B

(d) Neither A nor B

Question 4:- 

Tax planning opportunities arise due to difference in ………… amongst various Countries

(a) Tax rates

(b) Tax exemptions

(c) Both A and B

(d) Neither A nor B




Question 5:- 

Transactions between unrelated entities are carried out at –

(a) Arm’s Length Price

(b) Control Price

(c) Either A or B

(d) Both A and B

Answers

1. (a) Overstated
2. (b) USD 10
3. (a) Controlled legal entities within an enterprise
4. (c) Both A and B
5. (a) Arm’s Length Price

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