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FM to release direct tax code on time, deliver budget vow
August, 11th 2009

In his Budget speech last month, Finance Minister Pranab Mukherjee had promised that the much-awaited new Direct Tax Code would be released within 45 days and it looks like he is going to deliver on that promise. Isha Dalal reports.
Sources say the Direct Tax Code will be released on Wednesday, August 12. This will of course be a draft version of the code that will be opened up to public debate and comments before it finally becomes law.

The industry, from this code, has been expecting that the governments views on contentious issues like permanent establishment, withholding tax, royalties, the differences between business and government capital gains will become clearer.

Secondly, a key expectation is also that there will be clarity on the transfer pricing regime in terms of determining of arm lengths price.

Thirdly, experts are expecting that some version of a controlled foreign corporation (CFC) regime will be introduced. This regime will offer clarity on taxation of foreign subsidiaries. Even as it may take time to become a law, industry experts and the tax and legal fraternity have been looking forward to this code for a long time.

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