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: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: cpt :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: VAT Audit :: Central Excise rule to resale the machines to a new company :: empanelment :: form 3cd :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: VAT RATES :: due date for vat payment
 
 
Transfer Pricing »
 India signs Advance Pricing Agreements with the Netherlands
 India eases bilateral transfer pricing norms
 India to accept transfer pricing APA, MAP applications even if corresponding adjustment treaty provision absent
 India Finalizes Pricing Reporting Rules Under OECD Plan
 Final Transfer Pricing Rules For Multi-Nationals Notified
 Govt eases transfer pricing norms for offshore funds
 India’s final transfer pricing master file rules retain unique flavor
 Transfer pricing: tighter reporting norms for multinationals notified
 Transfer pricing once again comes to the fore for MNCs
 Valuation rules under GST could lead to transfer pricing disputes
 A web of requirements in transfer pricing regime

Private equity funds take double decker route to escape tax here
September, 20th 2017

Some private equity funds are experimenting with ways to circumvent the law on indirect transfer of shares by setting up two-tiered structures in countries where treaties prevent Indian authorities from taxing the transactions, said people with direct knowledge of the matter.

Often called a ‘double-decker Dutch sandwich’ or ‘double-decker’, these structures are aimed at avoiding getting taxed in India and may run afoul of Indian authorities and the provisions of the General Anti-Avoidance Rules (GAAR).

Rules for indirect transfer of shares — introduced in 2012 after Vodafone won a transfer-pricing tax dispute with the government — provide for taxing overseas transactions in shares of Indian companies if the shares constitute more than 50% of the foreign fund’s total assets (exceeding Rs 10 crore). If caught on the wrong foot, private equity (PE) funds can face about 20% tax on long-term capital gains and higher tax of 30-40% on short-term capital gains, said industry experts.

“Many PE firms have created the structures, known as double-decker structures, where they are creating a buffer company from where investments in India will be made. This is mainly done by foreign companies making strategic investments in India,” said Amit Singhania, partner in law firm Shardul Amarchand Mangaldas.

This is how it works: A fund sets up a firm or pooling vehicle in Netherlands or Germany but does not directly invest in India. It sets up another step-down subsidiary in the same country that makes the investment. At the time of sale, the shares in the subsidiary are sold to be new buyer. These structures are set up only in those countries which prevent Indian authorities from probing such transactions.

While this is a textbook case of indirect transfer of shares, experts said some of India’s tax treaties with these countries may safeguard such investments from the probing eyes of the taxman.

 
 
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