Global professional services provider Ernst & Young has launched an outbound tax advisory service group for India to assist companies making cross-border acquisitions with tax efficient structures for internal transactions.
The services will also complement the firm's existing transaction advisory solutions for overseas acquisitions such as M&A advisory, valuation and transactions.
When competing in the international market, tax incidence and planning can play a vital role in evaluating acquisition-related cost and subsequent valuations, said Mr Declan Gavin, Head, Outbound Tax Advisory Services. Some of the issues that need to be addressed during acquisition are structuring of transaction, repatriation stra- tegies, tax-efficient supply chain management, post-acquisition restructuring and transfer pricing.
The Indian tax system created additional burden on domestic companies for repatriation of funds, in the form of a 34 per cent tax on dividend repatriated. This generally does not exist in other countries.
Ernst & Young will work with companies to identify locations that they can use to hold internal investments in a tax effective manner.
Mr Jonathan Fox, Regional Head of International Tax Services, said, "Increasing competition in domestic and international markets and the geographical disinter-mediation of supply chains is driving Indian organisations towards cross-border growth strategy."