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: ACCOUNTING STANDARD :: TDS :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: empanelment :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: VAT RATES :: VAT Audit
 
 
« Sales Tax »
 India Fails to Break Deadlock on New Sales Tax
 Sales tax staff protest against goods service tax council
 Income tax survey on city jeweller
 Service tax levy to weigh on upstream companies’ earnings
 5 pc tax on online sales awaits Cabinet approval
 Amendment to Additional Sales Tax Act unconstitutional: High Court
 Maharashtra will soon achieve Rs one lakh cr sales tax : CM Devendra Fadnavis
 CBEC chief bats for minimal exemptions for India Inc under GST
 Issuance of Free Sale & Commerce Certificate to Merchant Exporters
 Why model GST law does not give confidence to exporting community
 State governments tighten their grip on sales tax holidays

Foreign investors seek a non-adversarial and stable tax regime
February, 23rd 2016

Is India back on the world map as a lucrative investment jurisdiction? Does the world see the Make in India dream becoming a reality? Well, the $222 billion investment pledges received during the Make in India week do resonate the revived positive sentiment!

tax3In fact, recent policy measures have clearly been lauded by the investor community. Clarity on applicability of MAT for foreign investors, setting up of high level committee to interact with trade and industry and bringing clarity on tax laws, relaxation in the Foreign Direct Investment regulations for certain sectors, signing of advance pricing agreements, are some such measures.

This wave of positive sentiments will continue only if we keep surfing right. The Indian government and tax authorities will need to keep up with the expectations of foreign investors to continue on the growth trajectory. Providing investment allowances and R&D benefits for the Make in India projects in the 2016 budget could be a good starting point.

Reducing the DDT rate along with the proposed corporate tax reduction to 25 percent could help investors repatriate greater profits back home. Providing for non-applicability of MAT on exempt incomes/entities could provide true meaning to the exemptions.

Moreover, as we move towards a truly globalised world, income tax exemption for cross border mergers should also be introduced, after their inclusion in the Companies Act 2013.

With respect to the dreaded indirect transfer regime of India, specific exclusions for intra group transfers (other than amalgamation and demerger) and transfers by listed foreign entities should be considered. An investor favours a tax jurisdiction which provides certainty on taxes even if tax rates are on a higher side.

Acceptance of recommendations made by the Easwar Committee on tax procedure simplification would make life easier for tax payers, besides reducing litigation, and strengthening India’s position on Ease of doing business index.

A reality which could hit hard in the 2016 budget will be the mandatory action plans of the OECD’s Base Erosion and Profit Shifting (BEPS) project. Actions like preventing harmful tax practices, treaty abuse, country-by-country reporting, and dispute resolution could potentially find their way into the Statute.

Nevertheless, Action 13 provides for country-by-country reporting which prescribes a three- tiered documentation approach consisting of the Master file (high level information about the MNC’s business, transfer pricing policies, and agreements with tax authorities), local file (capturing material transactions of the local taxpayer) and Country-by-country report (CBCR).

The CBCR shall capture information relating to global allocation of MNE’s income and taxes together with certain indicators of location of economic activity within the MNE group. High level information about the jurisdictional allocation of profits, revenues, employees and assets would also get captured. This will be the most critical item which will bring about greater transparency in the global tax systems.

Another provision which could seek a substance-based residency of corporations is the Place of Effective Management (POEM) provision, which though applicable from the financial year 2015-16, should be deferred by another year due to lack of final guidelines till now.

Deferring applicability of these provisions to financial year 2016-17 would allow tax payers to have better law compliant implementation.

Last, but not the least, measures which improve ease of doing business in India shall be highly appreciated by the global investor community.

Only saying Atithi Devo Bhava would not suffice, now is the time for action and not lip service. So let’s get our act together, and make Incredible India an incredibly desirable investment jurisdiction.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Internet Marketing Website Marketing Internet Promotion Internet Marketing India Website Marketing India Internet Promotion India Internet Marketing Consultancy Website Marketing Consulta

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