Latest Expert Exchange Queries
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: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: TDS :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: due date for vat payment :: VAT RATES :: empanelment :: cpt
 
 
News Headlines »
 Is government tapping your phone?
 Income tax department to use analytics to look for discrepancies in bank accounts
 GST Council fails to break deadlock over indirect tax regime, next meet on Dec 11 and 12 to hammer out differences
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government

New tax code to stop treaty shopping
December, 22nd 2008
The government may introduce provisions in the new direct tax code to prevent misuse of double taxation avoidance agreements India has with other countries. The new code is likely to be unveiled before the year ends. A government official said a discussion paper on the code, a major initiative undertaken under the guidance of the former finance minister and present home minister P Chidambaram, is being fine-tuned. A discussion paper on the code explaining the rationale behind every change would be placed in the public domain, the official added. A draft bill on the code may also accompany the paper to enable everyone to express their views on the proposed changes. Double taxation treaties are essentially agreements between two countries that seek to eliminate the double taxation of income or gains arising in one country and paid to residents/companies of the other country. The idea is to ensure that the same income is not taxed twice. In many instance, however , these agreements are misused to evade taxes. This is called treaty shopping, where usually residents of a third country take advantage of a tax treaty between two countries. For example, many companies in other countries route their investments into India through Mauritius or Cyprus to take advantage of the tax treaty that these countries have with New Delhi. Both, India-Mauritius and India-Cyprus tax treaties provide that capital gains arising in India from the sale of securities can only be taxed in Mauritius and Cyprus. This means no capital gains tax on investments in securities routed through Mauritius and Cyprus, as they do not levy tax on capital gains. The discussion paper on the code would explore ways to check this treaty-shopping. Mr Chidambaram was actively involved in the exercise of drafting the code. At the Economic Editors Conference in November, he had said the draft code would be placed in the public domain soon. I have to read another 19 pages of the discussion paper. The discussion paper and the draft is ready, he had said. Some options like a general anti avoidance rule(GAAR), provisions allowing examination of the real nature of a transaction and a limitation of benefits clause are being actively examined. Many countries like Singapore and Canada have a general avoidance provision, GAAR in their domestic income-tax laws to ensure that treaty benefits accrue only to genuine investors. Singapore also allows examination of the real nature of a transaction. Earlier, an internal panel in the income-tax department, which examined the issue of treaty abuse and ways to prevent it, had also made recommendation in favour of GAAR and a special provision for examination of real nature of transaction. A special provision allowing for examination of the real nature of a transaction in the present income-tax law would have given Indian tax authorities a natural right to examine Vodafone Group Plcs $11.2-billion transaction to acquire controlling stake in Hutchison Essar, a company based in India. Vodafone has not given the income-tax (I-T ) department the confidential documents related to the transaction that involved transfer of stake by the offshore entity which held stake in Hutchison Essar to another offshore entity owned by Vodafone. Indian tax authorities want to tax the transaction on the ground that it involved transfer of an Indian asset and have got a major boost after the Bombay High Court dismissed the telecom companys writ petition against the show-cause notice of the I-T department. The government had attempted to bring in some antiabuse provisions in the Union Budget, 2007-08 , but had dropped the idea in favour of the code, work on which had already begun by then.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

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