• In order to reduce transfer pricing disputes, to provide certainty to taxpayers, to align safe harbour margins with industry standards and to enlarge the scope of safe harbour transactions, the Central Board of Direct Taxes (CBDT) has notified a new safe harbour regime based on the report of the Committee set up in this regard.

What is ‘Safe Harbor’

• Safe harbor refers to a legal provision to reduce or eliminate liability in certain situations as long as certain conditions are met.
• Safe harbor also refers to a shark repellent tactic used by companies who do not want to be taken over, where they purposefully acquire a heavily regulated company to make themselves look less attractive to the entity considering taking them over.
• The phrase “safe harbor” appears in the finance, real estate and legal industries in a number of different ways.