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: form 3cd :: empanelment :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT Audit :: TDS :: cpt :: articles on VAT and GST in India :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS
« News Headlines »
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016

How Obama's tax plan will help IT Companies
May, 06th 2009

India's home grown IT companies actually have something to cheer from Obama's tax plan. The plan, if it goes through, will make the likes of TCS, Infosys and Wipro more price competitive against their US counterparts like IBM, HP and Accenture.

This is because the plan imposes huge new tax burdens on American technology companies. An analysis by The Associated Press estimates that collectively, HP, IBM, Cisco, Microsoft and Google lowered their tax bills by a combined $7.4 billion in their last fiscal years by taking advantage of lower tax rates outside the US.

"Through the years, these five companies have avoided US income taxes and foreign withholding taxes on a combined $72 billion in undistributed earnings from their foreign operations. By reinvesting their earnings overseas, US companies insulate themselves from much higher tax rates had the money been made in their home country," an AP report says.

Google, it says, would have been hit with an effective tax rate of 45.2 per cent instead of 27.8 per cent last year if it hadn't been able to capitalise on lower rates overseas. Without the lower foreign rates, Google's 2008 tax bill would have been $1.02 billion higher.

HP, according to AP, reaped a $1.77 billion benefit in its fiscal 2008 from lower foreign tax rates while Cisco and Microsoft each saw benefits of more than $1.6 billion. IBM's foreign tax advantage last year totaled about $1.3 billion, says AP.

"It would be like an earthquake for high tech," Carl Guardino, chief executive of Silicon Valley Leadership Group, an industry trade association , has been quoted as saying. "On a Richter scale of 1 to 10, this would be a 12."

Analysts say that fresh tax impositions would mean that US IT service providers will per force have to increase their billing rates. And if those rates go up, Indian companies become correspondingly more competitive in any IT project for which they are bidding against American competitors.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Team

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