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 :: empanelment :: due date for vat payment :: cpt :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: list of goods taxed at 4% :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: form 3cd
 
 
Direct Tax »
 In some instances, filing of income tax return may not be mandatory
 Best 5 Income Tax-Saving SIP plans in India: How To save taxes by Investing in SIPs under 80C
 Tax refund checks are finally in the mail
 Income Tax dues in advance can be paid at RBI or at authorised bank branches by March 2017
 Why you must be looking beyond tax planning
 I-T dept. to lauch app for paying tax
 CBDT to taxman: Step up TDS survey operations to boost collections
 Tax Officers Asked To File Self-Appraisal Report On E-Assessment
 CBDT to taxman: Step up TDS survey ops to boost collections
 Govt to issue exemption list on new tax for unlisted firms
 CBDT issues third round of certificates to tax payers

FM push for tax pacts
March, 10th 2014

In an effort to deliver on his promise of offering tax certainty, Finance Minister P Chidambaram is trying to address the transfer pricing woes of multinational companies by inking a few Advance Pricing Agreements (APAs) before a new government is formed after the Lok Sabha polls in April-May.

APAs can help avoid recurrence of transfer pricing disputes between the income tax authorities and MNCs. The tax department is currently embroiled in transfer pricing rows with Vodafone and Shell.

The safe-harbour norms (provision in a statute or regulation which specifies in advance something deemed not to violate a given rule) announced in August 2013 got a lukewarm response from industry, with the finance ministry getting barely 36 applications last year. Chidambaram seems keen on closing a few APAs - a deal between taxpayer and department to decide in advance the pricing of a transaction between an MNC and its group companies in India

"We are at an advanced stage in a few APAs. Every effort is being made to close these before March 31. Wherever companies have come forward with data, we are moving ahead," said a finance ministry official, who did not wish to be identified because of the confidentiality pact with applicants.

Unlike with safe harbour, MNCs have welcomed APAs, with the department receiving 146 applications last year, of which 117 were for unilateral ones. Of these, 142 applications came in the last 15 days. A similar number, mostly for unilateral APAs, have come this year, too; the last day for applying is March 31. Unilateral APAs are between taxpayer and the tax authority in India; in bilateral APAs, the country where the parent MNC is based is also involved.

"Applications have come from all sectors, including information technology, IT-enabled services, media, manufacturing. Some cases have been resolved, some are under discussion. A draft APA agreement has to be approved by the law ministry, following which we will take it forward," said another official involved in the process.

Officials said in the cases at an advanced stage, field visits and most of the fact-finding have been done. It might take only a few more meetings with the assessee to conclude these. It is learnt the finance minister is clearing all the APA files sent to him without any delay, so that some agreements can be finalised during the tenure of the current UPA government.

"About 10-15 APAs are at an advanced stage and at least two to three unilateral APAs might be finalised in the current financial year. No country in the world has finalised APAs so soon. But everything is not in our hands. It depends on the assessee, too," said a third official.

Industry has hailed APAs as a positive step, while denouncing safe harbour, where they feel the margins set by the Central Board of Direct Taxes are "much higher" than the actual profits companies are making. Owing to a poor response, the department is considering overhaul of the safe harbour rules for next year, and a final decision will be taken by the next government. "Currently, safe harbour caters to a limited sector. It needs to include more. Second, the margins prescribed by CBDT are too high. APA is an expensive and long process but it gives you certainty. The rate agreed upon by two parties is fixed for five years," said Rakesh Nangia, managing partner with chartered accountancy firm Nangia & Co.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
System Testing Solution Manual Software Testing Solutions Automation Software Testing Solutions System Workflow Testing System Manual Testing

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