Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TDS :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: cpt :: articles on VAT and GST in India :: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: VAT Audit :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
Direct Tax »
 CBDT: GST not to be added for TDS computation
 Five interest incomes you are likely to forget to include in your tax return
 GST not to be added for TDS computation
 GST not to be added for TDS computation
 Income Tax Return (ITR) Filing: Common Mistakes That Could Get You A Tax Notice
 Income Tax department asks tax practitioners to register entities separately
 Last Date To File Income Tax Return. Here Are The Details
 New tax regime will deliver a mixed bag with some items turning costly
 New members at CBEC, CBDT
 CBDT signs 5 more unilateral advance pricing agreements with taxpayers
 Find out potential taxpayers; focus on smaller cities: CBDT to taxmen

CBDT for tightening norms proposed in Direct Taxes Code
November, 12th 2009

The Central Board of Direct Taxes (CBDT) has urged tightening of the provisions on international taxation proposed in the new Direct Taxes Code, 2009.

According to official sources, two issues needing a close look are clarity on general anti-avoidance rules (GAAR) and widening the definition of permanent establishment (PE).

The ministry of finance is currently reviewing the Code for finalisation, following diverse feedback.

GAAR empowers the tax department to declare an arrangement or structure worked out by a company for any business purpose as an impermissible if it is wholly aimed at avoiding tax. While the Income Tax Act of 1961 did not have any such provisions, the new Code does, albeit with riders.

Officials added that the original intent for including this provision was to override provisions in double taxation avoidance agreements (DTAAs). Officials say while the provisions of individual DTAAs have their own relevance, it should not act as a tool for avoiding taxes.

A case in point is the recent discussion by the central government with tax-haven countries like Mauritius, where many Indian or foreign companies are creating special purpose vehicles to route business into India just to avoid paying taxes.

If it is felt that the objective of a structure is only to evade tax in India, then GAAR should prevail over any DTAA or any other provisions, said officials.

However, the Code also says that between any treaty and the Code, whichever comes into effect later should prevail.

Officials say DTAAs have been worked out under the Income Tax Act, 1961. They have to be reworked so as to ensure its relevance under the new Code. Going by this, provisions of DTAAs will prevail, since they will be reworked only after the new taxes code get finalised.

Therefore, it should be clearly stated in the Code that a GAAR provision should prevail over any treaty or any agreement if certain business arrangements have been entered into only for the purpose of avoiding taxes.

At present, there is no concept of PE for taxing income deemed to arise in India under Section 9 of the Income Tax Act, 1961, meant to tax income of foreign entities operating in India. Currently, the relevance of PE is restricted to provisions in transfer pricing.

While the definition has been incorporated in the draft Code, the scope is limited, since it only refers to a fixed place through which the business operates. CBDT has suggested reworking the definition on the basis of the model tax convention of the United Nations which includes a business site, a construction, assembly or installation project or supervisory sites, assembly and installation projects.

Besides, the UN model tax convention requires only a period of six months from the time of the setting up of such an arrangement to assume it as a permanent establishment.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Enterprise Resource Planning Solutions ERP Solutions Enterprise Resource Planning Software Solutions ERP Software Solutions Supply Chain Management Solutions SCM Solutions Supply Chain Management Software Solutions SCM Software Solutions Enterprise Resource Planning Solutions India ERP Solutions India Enterprise Resource Planning Software Solutions India ERP Software Solutions India Supply Chain Management Solutions India SCM Solutions India Supply Chain Management Software Solutions India SCM Software Solutions India

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions