During the financial year 2024-25, ZX International Singapore (a company incorporated in Singapore) held shares carrying voting power of 25% in ZX…
CA Final · Direct Tax Laws and International Taxation · PYQS · September 2025
During the financial year 2024-25, ZX International Singapore (a company incorporated in Singapore) held shares carrying voting power of 25% in ZX (India) Ltd (an Indian Company). XZ (India) Ltd., who is a wholly owned subsidiary of ZX International Singapore, also held shares carrying voting power of 36% in ZX (India) Ltd. ZX (India) Ltd is engaged in manufacturing of industrial chemicals and for such manufacturing, it is wholly dependent on the technical know-how provided by ZX International Singapore. During the financial year, royalty of 25 Crores was paid by ZX (India) Ltd. to ZX International Singapore. Considering the above facts, which of the following statements is correct:-
Suggested Answer and Working Notes:
Correct Answer: Option (B)
XZ (India) Ltd and ZX (India) Ltd, both are associated enterprise of ZX International Singapore.
Topics: Transfer Pricing, Double Taxation Relief, Non-Resident Taxation
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