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: form 3cd :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: due date for vat payment :: ACCOUNTING STANDARDS :: VAT RATES :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: cpt
 
 
« News Headlines »
 Tax Return Preparer (Amendment) Scheme, 2018
 Tax-saving for young earners simplified
 How to save income tax? Here are 6 investments with tax free income
 10 Top salary deductions that can save tax for you
 What are the tax saving options beyond Section 80C?
 The penalties for not paying tax on time
 How to make your salary tax efficient
 I-T Department may go into overdrive this quarter
 Ways to reduce the TDS deduction from your salary
 4 Tips for choosing who prepares your 2017 Tax Returns
 Processing of income-tax returns under section 143(1) of the Income-tax Act which were filed in Forms ITR-1 to 6 & applicability of section 143(1)(a)(vi)

Foreign tax haven base for infra SPVs
May, 31st 2007

The proposed offshore special purpose vehicles (SPV) for funding infrastructure projects, that will utilise a part of the countrys $200-billion foreign exchange reserves, are likely to be set up in a tax haven.

The Netherlands, Cyprus and Singapore are among the locations that may be considered once a decision to set up the SPVs is taken. The government is proposing to set up two SPVs.

Since one of the proposed SPVs will lend to domestic infrastructure companies for financing their capital imports, the tax regime as well as lending norms of the country in which the SPV may be established will be factors that will determine its location, government sources said.

If a decision to establish the SPVs is taken, it will be done in a tax haven, a finance ministry official said. While an announcement to utilise a part of the countrys foreign exchange reserves for financing the countrys creaking infrastructure was made in Budget 2007, the proposal is yet to be reviewed formally by the central bank.

The various applicable withholding taxes in a particular country, lending norms and exchange control restrictions will be the factors that will determine where such an SPV would be located. The Netherlands, for instance, has low withholding taxes and does not have stringent lending norms and exchange control restrictions, KPMG India M&A tax head Girish Vanvari said.

A company set up in a foreign country that lends to Indian companies is subject to taxes in both countries. For instance, a company based in Cyprus lending to an Indian company will receive interest income after deduction of a 10% tax by the Indian government. According to the India-Cyprus treaty, a 10% tax is levied.

Also, the Cyprian government levies a 10% tax on interest income earned by local companies. However, under the double taxation avoidance treaty, such a company, while paying tax in the country of origin, would be remitted the tax paid in the country in which the money was lent.

Hence, the effective tax paid by a company located in Cyprus on interest income earned from lending in India would be only 10%. Effective tax rates in Singapore, the Netherlands and Mauritius are 18%, 15% and 21.12% respectively, experts pointed out.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

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