Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get 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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: form 3cd :: VAT RATES :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: list of goods taxed at 4% :: empanelment :: ACCOUNTING STANDARD :: TDS
 
 
« Direct Tax »
 Advance tax calculation: Firms may have to furnish Apr-Sept income estimates
 Companies may have to furnish Apr-Sept income estimates to I-T dept
 CBDT working on a draft rule that makes it compulsory for companies to provide income estimates by Nov 15
 Companies, HNIs may soon have to specify reason for paying less advance tax than previous year
 TDS Applicability On Government Contracts Under Gst (Under Section 51 Of The Cgst Act, 2017)
 CBEC tells field officers to take GST disputes to Supreme Court
 Jurisdiction-free income-tax assessment on the cards
 CBDT asks I-T department to take urgent steps
 TDS on interest on deposits made under the Capital Gains Accounts Scheme, 1988 where the depositor has deceased
 Tax evaders set to face action: CBDT chairman Sushil Chandra
 Income-tax department calls big corporate entities to pay advance taxes

New tax residence norms may not cover foreign firms global income
March, 20th 2015

The Central Board of Direct Taxes (CBDT) will issue detailed guidelines to ensure that non-resident companies holding a board meeting or two in India do not get any tax demands on their global income on account of New Delhi’s new wider definition of a resident company.

Sources said the new definition of tax residence introduced in Finance Bill 2015 was primarily aimed at preventing companies incorporated in India from escaping taxes on their worldwide income by holding one or two board meetings abroad and claim non-resident status.

Such escape from tax domicile status was possible because the existing definition of a resident company required its control and management to be wholly in India ‘throughout’ the financial year.

The Finance Bill brought within the definition of tax residence any company, the ‘place of effective management’ of which was in India at any time of the relevant financial year. Such place of effective management includes a place from where the key management and commercial decisions necessary for running the company are, in substance, made. This raised fears that non-resident multinational companies that wish to hold a board meeting here to showcase the country’s business potential to its stakeholders might come under India’s definition of a tax resident.

If that happens, the global income of such company would become taxable here.

Unlike countries like the US, India levies tax on the worldwide income of only resident companies. If non-resident companies have operations in India, they need to pay tax only on income from such local operations, not from their worldwide operations. If the Indian operations of a non-resident is organised in the form of a subsidiary company, the subsidiary is treated as a resident but not the parent.

A person privy to discussions in the finance ministry said that the proposed clarification will make it clear to all field officers of the Income-Tax Department that the amendments to Section 6 of the Income Tax Act were not aimed at taxing the global income of non-resident companies for the sole reason that a few board meetings are held here.

“The CBDT will issue detailed guidelines so that there is no arbitrary exercise of power and it becomes transparent as to what constitutes effective management. So far as a foreign company that has no business in India is concerned, it cannot be taxed in India just because a board meeting is held here,” said the person, adding the new definition was internationally accepted.

“The expected guidelines will provide the much-needed clarity, soothe the nerves of foreign investors and help avoid a narrow interpretation being used by the tax officers against the spirit of the lawmakers,” said Amit Maheshwari, Partner, Ashok Maheshwary & Associates.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

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