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: list of goods taxed at 4% :: articles on VAT and GST in India :: due date for vat payment :: VAT RATES :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: VAT Audit :: TDS :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
General »
 Non-performance: I-T dept transfers 245 commissioners
 Income Tax efiling: Tax implications resulting from clubbing of income
 Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd
  GST: How companies are gaming the system
 Goods And Services Tax transparency: Elimination of added taxes to boost investment in realty
 In a first, Income Tax department to charge govt official under new benami law
 Income Tax Return Filing: 10 common mistakes people make while filing return of income
 Income Tax efiling: A few essential facts for senior citizens to keep in mind
 Pre-GST discounts get Maharashtra 16% more sales tax in three months
 Here’s how self-employed should efile their taxes
 Advance tax given by individuals in June quarter rises more than 40%

Gets tax benefit on capital gains
March, 11th 2010

A Dutch company earning capital gains by selling shares in its Indian subsidiary does not need to pay tax in India if it offloads the shares to a non-resident entity, according to authority for advance ruling (AAR), the quasi-judicial body that decides on tax matters involving overseas firms.

The AAR came out with the order last week after a Dutch company KSPG sought ruling on its proposed divestment of shares in its Indian arm.

In its application, the foreign company asked AAR for two clarifications: One, whether it is subject to pay capital gains tax if it sells shares of its Indian subsidiary and two, whether it would need to pay tax in the event of buy back of shares of its local subsidiary.

KSPG has also sought exemption from AAR on payment of capital gains tax, citing the India-Netherlands Double Taxation Avoidance Agreement (DTAA), which provides for exemption if the gains earned from India arise from a transfer of shares of an Indian company to a non-resident firm.

The AAR held that tax is not payable in India on the sale of shares of an Indian company by a non-resident entity to another non-resident firm. AAR said the issue of payment of tax in India in the event of the buy back of these shares can be dealt in a separate application.

Shefali Garodia, partner, BMR Advisors, told ET: The ruling discusses principle of beneficial ownership in the context of tax treaties. But AARs reasoning for not ruling on the taxability in the event of buy back is not convincing.

A few years ago, KSPG had bought 100% stake of German firm Pierburg in Pierburg India. KSPG had made further investment in Pierburg India, post the transaction.

In the course of its argument at AAR, the Income-Tax department said that the transaction was carried out for the purpose of avoiding tax in India and therefore it does not merit tax exemption. It said the Indo-German tax treaty should be applicable in this case, as it the German firm Pierburg that gained from the transaction.

Under the Indo-German tax treaty, tax is payable in India for such transactions, the I-T department said. The AAR did not agree with the departments view. It pointed out that the Dutch company was a distinct legal entity with separate board of directors.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Company Overview

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