India resolves tax disputes worth Rs.5,000 cr with foreign companies
The cases that have been resolved in the past two years are related to sectors like software and other IT-enabled services, manufacturing and consultancy The Dollar Business Bureau According to the government, MAP is an effective tax dispute resolution mechanism, which ensures smooth business environment for foreign investors and reduce the number of cases under litigation The Indian tax authority has resolved 180 disputes worth Rs. 5,000 crore pending with various foreign companies since April 2014 under the framework of Mutual Agreement Procedure (MAP). MAP, which is part of the Double Taxation Avoidance Agreement signed by the Indian government with the US and other countries, allows smooth settlement of tax-related issues concerned with multinational companies operating from India. Most of the disputes emerge due ...
India expedites easing tax norms for multinationals
Sai Nikesh | The Dollar Business BEPS project implementation would lead to higher tax payment in source countries like India, and multinationals will need to accept this reality , says Nilesh Kapadia, Chartered Accountant and partner at N M K & Co The Finance Ministry is prioritising implementation of measures like Base Erosion and Profit Shifting (BEPS) mechanism in order to ease taxation norms for multinational companies. “Industry should start working towards BEPS readily, in order to keep up with the upcoming changes. The objective of the BEPS project is to prevent strategies to shift profits and review the whole system of international taxation. It is aimed at domestic resource mobilisation,” said Akhilesh Ranjan, Joint Secretary at the Central Board ...
India signs advance pricing agreements with two MNCs
Source: PIB, Government of India As part of a major initiative to usher certainty in taxation, the Central Board of Direct Taxes (CBDT) entered into two unilateral advance pricing agreements (APAs) with two MNCs The agreements signed last week include the first APA with a “rollback” provision. An APA with the “rollback” provision extends tax certainty for nine financial years as against five years in APAs without “rollback”. With this, the CBDT has so far signed 14 APAs of which 13 are unilateral and one is bilateral. The signed APAs relate to various sectors including telecommunication, oil exploration, pharmaceuticals, finance/banking, software development services and ITeS (BPOs). Unilateral APAs have been signed between Indian taxpayers and the CBDT without involvement of the ...
Centre prepares draft to include range concept in transfer pricing
The Dollar Business Bureau In an effort to make international transactions more convenient, the finance ministry has proposed a new rule for determination of arm’s length prices of any goods or services exchanged between multi-national companies in India and their units abroad. The Income Tax department has already prepared a draft of the proposed rule which seeks to change the method used to calculate taxes on such transactions. The move came in the wake of a number of incidents of tax avoidance through manipulation of transfer pricing regime by companies having business in India and other countries. The Finance Ministry has sought comments and suggestions on the draft scheme of the proposed rules for computation of arm length price (ALP) ...
