The document discusses international taxation issues arising from retrospective amendments made to tax laws. Some key points discussed include:
1. A person who had never deducted taxes on computer software in the past now has to go back and undo those mistakes due to retrospective amendments, even though he was not aware of them previously.
2. There are concerns about the validity of reopening past assessments and the impact on investors' views of India due to continuous litigation arising from retrospective amendments.
3. Definitions related to taxation of indirect transfers of Indian assets and concepts like royalty, software, and satellite transmissions have been expanded and applied retrospectively.
- Double taxation occurs when the same income is taxed twice, such as income being taxed in both the country where it was earned and the country of the taxpayer's residence.
- Double Taxation Avoidance Agreements (DTAAs) are designed to protect taxpayers from double taxation and encourage international trade and investment. However, these agreements can also be abused through practices like treaty shopping.
- Treaty shopping occurs when a resident of a third country seeks to obtain benefits from a DTAA between two other countries by establishing a company or entity in one of those countries. This allows the taxpayer to access favorable tax rates.
Anti-Treaty Shopping: A Comparative Analysis of the U.S. and OECD Model Tax C...Akunobera
The presentation highlights the key approaches taken by the U.S. and the OECD to combat treaty shopping techniques and highlights key differences between those approaches.
Overview of DTAA Provisions_WIRC_14.05.16 - Harshal BhutaHarshal Bhuta
This document provides an overview of the key provisions contained in Double Taxation Avoidance Agreements (DTAAs). It discusses the typical structure and categories covered in DTAAs such as scope, definitions, taxation of various types of income, methods to eliminate double taxation, and final provisions. For each article, it summarizes the United Nations (UN) Model Convention approach and provides some commentary on issues or differences compared to other models or in Indian DTAAs. The document analyzes important articles related to the taxation of business profits, dividends, interest, royalties, capital gains, independent and dependent personal services.
Double Taxation Avoidance Agreements (DTAAs) are agreements between countries to mitigate double taxation, where the same income is taxed by two countries. India has comprehensive DTAAs with 88 countries, specifying tax rates and jurisdiction for different types of income earned abroad. Sections 90 and 91 of India's Income Tax Act provide tax relief for income taxed abroad for countries with and without a DTAA with India. Many foreign investors in Indian stock markets operate through Mauritius due to its favorable tax treaty with India, which does not tax capital gains made on selling Indian company shares.
The document provides a summary of key articles in the OECD Model Convention on Double Taxation Agreements (DTAA). It outlines 30 articles that cover aspects such as persons covered, taxes covered, definitions, residential status, permanent establishment, taxation of various types of income including business profits, dividends, interest, royalties, capital gains, employment income and pensions. The articles also address exchange of information, assistance in tax collection and territorial extension of the DTAA.
Basics of Double Taxation Avoidance AgreementsGagan Singh
Double taxation avoidance agreements (DTAAs) are bilateral agreements between countries to avoid double taxation of the same income in both countries. DTAAs allocate taxing rights between the source and residence country and provide relief from double taxation through exemption or tax credit methods. For example, interest earned by a non-resident Indian in their non-resident ordinary bank account in India may be taxed at a reduced rate according to the DTAA between India and the NRI's country of residence rather than the default 30.9% withholding tax rate. India currently has over 80 DTAAs to avoid double taxation.
This document provides an introduction to international taxation and tax treaties. It begins with definitions of key concepts like globalization and international taxation. It then discusses tax treaties, including their objectives, evolution, models, and structure. The document outlines the prominent articles in tax treaties, including those related to definitions, distributive provisions, and anti-avoidance measures. It also discusses how tax treaties are interpreted and concepts like permanent establishment. Overall, the document aims to introduce fundamental aspects of international taxation and tax treaty frameworks.
- Double taxation occurs when the same income is taxed twice, such as income being taxed in both the country where it was earned and the country of the taxpayer's residence.
- Double Taxation Avoidance Agreements (DTAAs) are designed to protect taxpayers from double taxation and encourage international trade and investment. However, these agreements can also be abused through practices like treaty shopping.
- Treaty shopping occurs when a resident of a third country seeks to obtain benefits from a DTAA between two other countries by establishing a company or entity in one of those countries. This allows the taxpayer to access favorable tax rates.
Anti-Treaty Shopping: A Comparative Analysis of the U.S. and OECD Model Tax C...Akunobera
The presentation highlights the key approaches taken by the U.S. and the OECD to combat treaty shopping techniques and highlights key differences between those approaches.
Overview of DTAA Provisions_WIRC_14.05.16 - Harshal BhutaHarshal Bhuta
This document provides an overview of the key provisions contained in Double Taxation Avoidance Agreements (DTAAs). It discusses the typical structure and categories covered in DTAAs such as scope, definitions, taxation of various types of income, methods to eliminate double taxation, and final provisions. For each article, it summarizes the United Nations (UN) Model Convention approach and provides some commentary on issues or differences compared to other models or in Indian DTAAs. The document analyzes important articles related to the taxation of business profits, dividends, interest, royalties, capital gains, independent and dependent personal services.
Double Taxation Avoidance Agreements (DTAAs) are agreements between countries to mitigate double taxation, where the same income is taxed by two countries. India has comprehensive DTAAs with 88 countries, specifying tax rates and jurisdiction for different types of income earned abroad. Sections 90 and 91 of India's Income Tax Act provide tax relief for income taxed abroad for countries with and without a DTAA with India. Many foreign investors in Indian stock markets operate through Mauritius due to its favorable tax treaty with India, which does not tax capital gains made on selling Indian company shares.
The document provides a summary of key articles in the OECD Model Convention on Double Taxation Agreements (DTAA). It outlines 30 articles that cover aspects such as persons covered, taxes covered, definitions, residential status, permanent establishment, taxation of various types of income including business profits, dividends, interest, royalties, capital gains, employment income and pensions. The articles also address exchange of information, assistance in tax collection and territorial extension of the DTAA.
Basics of Double Taxation Avoidance AgreementsGagan Singh
Double taxation avoidance agreements (DTAAs) are bilateral agreements between countries to avoid double taxation of the same income in both countries. DTAAs allocate taxing rights between the source and residence country and provide relief from double taxation through exemption or tax credit methods. For example, interest earned by a non-resident Indian in their non-resident ordinary bank account in India may be taxed at a reduced rate according to the DTAA between India and the NRI's country of residence rather than the default 30.9% withholding tax rate. India currently has over 80 DTAAs to avoid double taxation.
This document provides an introduction to international taxation and tax treaties. It begins with definitions of key concepts like globalization and international taxation. It then discusses tax treaties, including their objectives, evolution, models, and structure. The document outlines the prominent articles in tax treaties, including those related to definitions, distributive provisions, and anti-avoidance measures. It also discusses how tax treaties are interpreted and concepts like permanent establishment. Overall, the document aims to introduce fundamental aspects of international taxation and tax treaty frameworks.
DOMESTIC TAXATION V/S INTERNATIONAL TAXATIONSundar B N
Domestic taxation involves taxes imposed within a country on residents and transactions, while international taxation covers cross-border transactions between associated enterprises in different countries. The key difference is that domestic taxation aims to raise revenue domestically, while international taxation seeks to manage interactions between national tax systems. Double taxation can occur internationally when the same income is taxed in multiple countries, but double taxation avoidance agreements (DTAAS) are designed to reduce this and encourage cross-border trade and investment by clarifying tax treatment and allowing foreign tax credits.
Double taxation avoidance agreement between india and canadarhejkrhfkBaivabiNayak
The document discusses the Double Taxation Avoidance Agreement (DTAA) between India and Canada. Some key points:
- The DTAA was signed in 1985 and came into effect in 1997 to help taxpayers avoid double taxation on the same income earned in both countries.
- It applies to taxes on income and capital imposed by India and Canada. This includes taxes on things like profits, dividends, interest, royalties.
- The DTAA defines terms like residence, permanent establishment, and outlines how different types of income like business profits, shipping/air transport income, capital gains, pensions are taxed under the agreement.
- The overall aim is to help residents of both countries avoid being tax
Double taxation occurs when the same income is taxed by both the country where it originates (source country) and the country of the taxpayer's residence (residence country). To reduce barriers to international trade, countries often negotiate double taxation avoidance agreements (DTAAs) which allocate taxing rights between the two countries. India has entered into over 60 such agreements. DTAAs aim to eliminate double taxation through methods like exemption (one country does not tax) or tax credit (residence country provides credit for taxes paid in source country). They define terms like permanent establishment that determine when business income can be taxed in the source country. DTAAs and limitations of benefits clauses help prevent treaty shopping where third parties get benefits not
This document provides an overview of a presentation on double taxation treaties (DTCs) or double tax avoidance treaties. It discusses the types of treaties, the purpose and objectives of DTCs, the legal status of treaties and model tax conventions, the structure of tax treaties based on the OECD model, how tax treaties interact with domestic tax laws, the distributive rules for allocating taxing rights between source and resident states, and the application and interpretation of tax treaty provisions. Key articles of the OECD model relating to the allocation of taxing rights are also summarized.
Non-resident Indians can avoid double taxation by using Double Taxation Avoidance Agreements (DTAAs) between India and other countries. DTAAs provide relief from double taxation through exemption, deduction, or credit methods. To use a DTAA, an individual must submit documents like a tax residency certificate and PAN to claim exemptions or credits. Key steps include checking the applicable DTAA, submitting required documents, and considering details like applicable tax rates and ensuring PAN is updated with banks.
This document discusses the Multilateral Instrument (MLI) Convention, which aims to implement tax treaty related measures from the OECD/G20 BEPS Project to prevent base erosion and profit shifting. The MLI will modify over 3000 bilateral tax treaties. Key features of the MLI include introducing principal purpose tests to prevent tax avoidance, adopting simplified limitation of benefit clauses, expanding definitions of permanent establishment, and improving dispute resolution mechanisms. India has signed the MLI and it will modify India's 93 tax treaties, though the effects on some treaties are unclear as not all countries participated. The MLI provides flexibility for each country to choose which provisions to adopt and will help address treaty shopping and other BEPS issues.
Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty between two countries to avoid double taxation of income earned by taxpayers of one country from sources in another country. DTAA divides taxing rights between the source and residence country to avoid double taxation. It provides relief to taxpayers through exemption and tax credit methods. India follows the OECD model convention for DTAA and has signed 88 agreements including with major trading partner China. DTAA promotes free flow of trade and investment by providing tax certainty and reducing tax burdens on multinational operations.
This presentation gives an overview of taxation of non resident indians and gives a basic understanding of Double Taxation Avoidance Agreements between countries. This is meant only for amateurs in the field of taxation and gives only a very basic and bird's eyeview on the subject.
Treaty shopping occurs when a person establishes an entity in a country with a favorable tax treaty to gain tax benefits they would not otherwise be entitled to. This is done through "conduit" entities that take advantage of reduced withholding tax rates in the source country, while the economic benefits flow to persons not entitled to the treaty. Direct conduits involve investing through an intermediary country to access a lower tax rate in the source country. Stepping stone conduits erode the source country's tax base through deductible payments to a third country with an exemption regime.
International Aspects Of Ugandas Income TaxationAkunobera
This document provides an overview of international aspects of Uganda's income taxation, including principles of residence and source. It discusses how residence determines worldwide versus domestic taxation. It also outlines the key tests for determining residence of individuals, companies, trusts, retirement funds and partnerships. Further, it examines the rules for sourcing different types of income such as interest, dividends, royalties, real property, and movable property.
This document discusses double taxation avoidance agreements between countries. It begins with an introduction that defines double taxation as the taxation of the same income by two or more countries. Double taxation creates barriers to international trade and investment. To reduce this, countries enter into double taxation avoidance agreements that coordinate tax jurisdictions and relieve double taxation.
The document then examines the concepts around double taxation avoidance agreements in more detail. It notes that the need for such agreements arises from conflicting tax rules and definitions in different countries. The agreements benefit citizens and help facilitate international economic relations by preventing double taxation. They can provide unilateral or bilateral/reciprocal relief from double taxation.
The basics about international treaties designed to prevent fiscal evasion, avoid double taxation and more recently to demonstrate compliance with global standards on transparency and the exchange of confidential taxpayer information. Commonly referred to as 'double taxation agreements' there are over 2,000 of this bilateral agreements in existence. www.franhendy.com ; @franhendy; www.facebook.com/franhendy
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
Relevance of double taxation avoidance agreement and its impactAmudha Mony
This document discusses double taxation avoidance agreements and their impact in India. It begins by defining double taxation as the imposition of two or more taxes on the same income, assets, or financial transactions in different countries. It then outlines the basic rules of source taxation and residence taxation. The document discusses India's double taxation avoidance agreements (DTAAs) with over 85 countries, which agree on tax rates and jurisdiction to avoid double taxation. Sections 90 and 91 of the Indian Income Tax Act provide bilateral and unilateral relief from double taxation. Finally, it briefly outlines the exemption method, credit method, and tax sparing method for eliminating double taxation through these agreements.
This PPT is mainly on the basics of International Taxation which is confusing for many students and many professionals too nowadays. During this evolving world of multinational culture, International Taxation has gained significant importance of which all the professionals should be aware of.
I have tried to compile the concepts of international taxation in this PPT except the concept of Transfer Pricing which in itself is like a whole book.
I have inserted the core concepts which lead to the emergence of International Taxation in India.
CONFLICT OF SOURCE AND RESIDENCE PRINCIPLES OF TAXATIONksanu
This document discusses various types of conflicts that can arise in international taxation between the principles of residence and source. Residence/source conflicts occur when the same income is taxed by both the country of residence under residence principles and the country of source under source principles. Source/source conflicts happen when multiple countries claim income was sourced from their territory. Residence/residence conflicts arise when two countries consider a taxpayer resident under their domestic laws. Double tax agreements aim to resolve these conflicts through provisions regarding sole residence or source taxation, or tiebreaker rules to determine sole residency.
This document discusses tax treaties between countries. [1] It provides an example of how a company could face double taxation by selling goods in a foreign country without a tax treaty. [2] Tax treaties aim to avoid double taxation by allocating taxing rights between countries, enhancing trade, preventing tax evasion, and allowing information exchange. [3] The document then discusses key concepts in tax treaties like permanent establishment and residency.
1) The document discusses double taxation avoidance agreements (DTAAs) between India and other countries.
2) DTAAs aim to avoid double taxation that may occur when the same income is taxed in both the country of residence and the country of source.
3) India has 84 DTAAs currently with other countries based on either the OECD or UN model conventions. The DTAAs provide relief from double taxation and clarify taxing rights between the two countries.
This document provides an overview of international taxation in India. It discusses key concepts like residence-based versus source-based taxation, types of international taxation, taxability of transactions, double taxation and relief measures. It also covers topics like foreign remittances, tax avoidance methods, tax treaties, and recent budget changes regarding international taxation in India. The document contains definitions of terms, explanations of concepts, and comparisons of the OECD and UN models of tax treaties.
This document contains a mock test paper for an Information System Control and Audit final course. It includes 7 questions with multiple parts each. Students are instructed to attempt any 5 questions out of the 7 provided. The questions cover various topics related to IT governance, risk management, internal controls, aligning IT and business strategies, information systems concepts, and decision support systems. The test is 3 hours long and worth a total of 100 marks.
Taxes are the most important source of government revenue and are classified as direct or indirect. Income tax was first introduced in India in 1860. The key purposes of taxes are to stabilize the economy, protect citizens, redistribute wealth, and provide government revenue. Direct taxes include income tax and wealth tax while indirect taxes include excise, customs, central sales tax, service tax, and state sales tax/VAT. An assessee is a person responsible for paying taxes under the Income Tax Act and can be an individual, HUF, company, firm, association, or artificial juridical person. The financial year runs from April 1 to March 31 and is also called the previous year, while the assessment year is the year following
DOMESTIC TAXATION V/S INTERNATIONAL TAXATIONSundar B N
Domestic taxation involves taxes imposed within a country on residents and transactions, while international taxation covers cross-border transactions between associated enterprises in different countries. The key difference is that domestic taxation aims to raise revenue domestically, while international taxation seeks to manage interactions between national tax systems. Double taxation can occur internationally when the same income is taxed in multiple countries, but double taxation avoidance agreements (DTAAS) are designed to reduce this and encourage cross-border trade and investment by clarifying tax treatment and allowing foreign tax credits.
Double taxation avoidance agreement between india and canadarhejkrhfkBaivabiNayak
The document discusses the Double Taxation Avoidance Agreement (DTAA) between India and Canada. Some key points:
- The DTAA was signed in 1985 and came into effect in 1997 to help taxpayers avoid double taxation on the same income earned in both countries.
- It applies to taxes on income and capital imposed by India and Canada. This includes taxes on things like profits, dividends, interest, royalties.
- The DTAA defines terms like residence, permanent establishment, and outlines how different types of income like business profits, shipping/air transport income, capital gains, pensions are taxed under the agreement.
- The overall aim is to help residents of both countries avoid being tax
Double taxation occurs when the same income is taxed by both the country where it originates (source country) and the country of the taxpayer's residence (residence country). To reduce barriers to international trade, countries often negotiate double taxation avoidance agreements (DTAAs) which allocate taxing rights between the two countries. India has entered into over 60 such agreements. DTAAs aim to eliminate double taxation through methods like exemption (one country does not tax) or tax credit (residence country provides credit for taxes paid in source country). They define terms like permanent establishment that determine when business income can be taxed in the source country. DTAAs and limitations of benefits clauses help prevent treaty shopping where third parties get benefits not
This document provides an overview of a presentation on double taxation treaties (DTCs) or double tax avoidance treaties. It discusses the types of treaties, the purpose and objectives of DTCs, the legal status of treaties and model tax conventions, the structure of tax treaties based on the OECD model, how tax treaties interact with domestic tax laws, the distributive rules for allocating taxing rights between source and resident states, and the application and interpretation of tax treaty provisions. Key articles of the OECD model relating to the allocation of taxing rights are also summarized.
Non-resident Indians can avoid double taxation by using Double Taxation Avoidance Agreements (DTAAs) between India and other countries. DTAAs provide relief from double taxation through exemption, deduction, or credit methods. To use a DTAA, an individual must submit documents like a tax residency certificate and PAN to claim exemptions or credits. Key steps include checking the applicable DTAA, submitting required documents, and considering details like applicable tax rates and ensuring PAN is updated with banks.
This document discusses the Multilateral Instrument (MLI) Convention, which aims to implement tax treaty related measures from the OECD/G20 BEPS Project to prevent base erosion and profit shifting. The MLI will modify over 3000 bilateral tax treaties. Key features of the MLI include introducing principal purpose tests to prevent tax avoidance, adopting simplified limitation of benefit clauses, expanding definitions of permanent establishment, and improving dispute resolution mechanisms. India has signed the MLI and it will modify India's 93 tax treaties, though the effects on some treaties are unclear as not all countries participated. The MLI provides flexibility for each country to choose which provisions to adopt and will help address treaty shopping and other BEPS issues.
Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty between two countries to avoid double taxation of income earned by taxpayers of one country from sources in another country. DTAA divides taxing rights between the source and residence country to avoid double taxation. It provides relief to taxpayers through exemption and tax credit methods. India follows the OECD model convention for DTAA and has signed 88 agreements including with major trading partner China. DTAA promotes free flow of trade and investment by providing tax certainty and reducing tax burdens on multinational operations.
This presentation gives an overview of taxation of non resident indians and gives a basic understanding of Double Taxation Avoidance Agreements between countries. This is meant only for amateurs in the field of taxation and gives only a very basic and bird's eyeview on the subject.
Treaty shopping occurs when a person establishes an entity in a country with a favorable tax treaty to gain tax benefits they would not otherwise be entitled to. This is done through "conduit" entities that take advantage of reduced withholding tax rates in the source country, while the economic benefits flow to persons not entitled to the treaty. Direct conduits involve investing through an intermediary country to access a lower tax rate in the source country. Stepping stone conduits erode the source country's tax base through deductible payments to a third country with an exemption regime.
International Aspects Of Ugandas Income TaxationAkunobera
This document provides an overview of international aspects of Uganda's income taxation, including principles of residence and source. It discusses how residence determines worldwide versus domestic taxation. It also outlines the key tests for determining residence of individuals, companies, trusts, retirement funds and partnerships. Further, it examines the rules for sourcing different types of income such as interest, dividends, royalties, real property, and movable property.
This document discusses double taxation avoidance agreements between countries. It begins with an introduction that defines double taxation as the taxation of the same income by two or more countries. Double taxation creates barriers to international trade and investment. To reduce this, countries enter into double taxation avoidance agreements that coordinate tax jurisdictions and relieve double taxation.
The document then examines the concepts around double taxation avoidance agreements in more detail. It notes that the need for such agreements arises from conflicting tax rules and definitions in different countries. The agreements benefit citizens and help facilitate international economic relations by preventing double taxation. They can provide unilateral or bilateral/reciprocal relief from double taxation.
The basics about international treaties designed to prevent fiscal evasion, avoid double taxation and more recently to demonstrate compliance with global standards on transparency and the exchange of confidential taxpayer information. Commonly referred to as 'double taxation agreements' there are over 2,000 of this bilateral agreements in existence. www.franhendy.com ; @franhendy; www.facebook.com/franhendy
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
Relevance of double taxation avoidance agreement and its impactAmudha Mony
This document discusses double taxation avoidance agreements and their impact in India. It begins by defining double taxation as the imposition of two or more taxes on the same income, assets, or financial transactions in different countries. It then outlines the basic rules of source taxation and residence taxation. The document discusses India's double taxation avoidance agreements (DTAAs) with over 85 countries, which agree on tax rates and jurisdiction to avoid double taxation. Sections 90 and 91 of the Indian Income Tax Act provide bilateral and unilateral relief from double taxation. Finally, it briefly outlines the exemption method, credit method, and tax sparing method for eliminating double taxation through these agreements.
This PPT is mainly on the basics of International Taxation which is confusing for many students and many professionals too nowadays. During this evolving world of multinational culture, International Taxation has gained significant importance of which all the professionals should be aware of.
I have tried to compile the concepts of international taxation in this PPT except the concept of Transfer Pricing which in itself is like a whole book.
I have inserted the core concepts which lead to the emergence of International Taxation in India.
CONFLICT OF SOURCE AND RESIDENCE PRINCIPLES OF TAXATIONksanu
This document discusses various types of conflicts that can arise in international taxation between the principles of residence and source. Residence/source conflicts occur when the same income is taxed by both the country of residence under residence principles and the country of source under source principles. Source/source conflicts happen when multiple countries claim income was sourced from their territory. Residence/residence conflicts arise when two countries consider a taxpayer resident under their domestic laws. Double tax agreements aim to resolve these conflicts through provisions regarding sole residence or source taxation, or tiebreaker rules to determine sole residency.
This document discusses tax treaties between countries. [1] It provides an example of how a company could face double taxation by selling goods in a foreign country without a tax treaty. [2] Tax treaties aim to avoid double taxation by allocating taxing rights between countries, enhancing trade, preventing tax evasion, and allowing information exchange. [3] The document then discusses key concepts in tax treaties like permanent establishment and residency.
1) The document discusses double taxation avoidance agreements (DTAAs) between India and other countries.
2) DTAAs aim to avoid double taxation that may occur when the same income is taxed in both the country of residence and the country of source.
3) India has 84 DTAAs currently with other countries based on either the OECD or UN model conventions. The DTAAs provide relief from double taxation and clarify taxing rights between the two countries.
This document provides an overview of international taxation in India. It discusses key concepts like residence-based versus source-based taxation, types of international taxation, taxability of transactions, double taxation and relief measures. It also covers topics like foreign remittances, tax avoidance methods, tax treaties, and recent budget changes regarding international taxation in India. The document contains definitions of terms, explanations of concepts, and comparisons of the OECD and UN models of tax treaties.
This document contains a mock test paper for an Information System Control and Audit final course. It includes 7 questions with multiple parts each. Students are instructed to attempt any 5 questions out of the 7 provided. The questions cover various topics related to IT governance, risk management, internal controls, aligning IT and business strategies, information systems concepts, and decision support systems. The test is 3 hours long and worth a total of 100 marks.
Taxes are the most important source of government revenue and are classified as direct or indirect. Income tax was first introduced in India in 1860. The key purposes of taxes are to stabilize the economy, protect citizens, redistribute wealth, and provide government revenue. Direct taxes include income tax and wealth tax while indirect taxes include excise, customs, central sales tax, service tax, and state sales tax/VAT. An assessee is a person responsible for paying taxes under the Income Tax Act and can be an individual, HUF, company, firm, association, or artificial juridical person. The financial year runs from April 1 to March 31 and is also called the previous year, while the assessment year is the year following
This document outlines the income tax slabs and rates for various entities in India. It provides tax rates for individual taxpayers, Hindu Undivided Families, associations of persons, bodies of individuals, artificial judicial persons, senior and super senior citizens, partnership firms, local authorities, domestic and foreign companies, and co-operative societies. It also mentions surcharges for incomes greater than Rs. 1 crore as well as education and secondary education cesses applied on income tax.
New Companies Act 2013 - Impact on SMU'sKarthik S Raj
The document discusses key provisions of the Companies Act 2013 relating to one person companies (OPCs) and small companies. Some of the key points summarized are:
1. A company may now be formed as an OPC with a sole member and director, with the subscriber nominating another person and obtaining their consent at incorporation.
2. OPCs enjoy certain relaxations such as having a minimum of one director and not requiring board meetings if there is a sole director.
3. To qualify as a small company, a company must have a paid up capital of less than Rs. 50 lakhs or turnover of less than Rs. 2 crores and not be a subsidiary or holding company. Small companies enjoy
The document describes the Philippine national budget preparation process. It begins with the Department of Budget and Management issuing a budget call to agencies in December, providing parameters and guidelines. Agencies are now tasked with partnering with civil society organizations in preparing their proposals. For the first time, the 2013 budget will use a "bottom-up" approach, engaging grassroots communities in 300-400 poor municipalities. The proposals then go through technical hearings and executive review before being consolidated into a proposed national budget that is presented to the President and Cabinet for approval and submission to Congress.
This document discusses budgeting and budgetary control. It defines a budget as a quantitative plan, usually monetary, for a specific time period, often one year. Budgets can be capital budgets for new projects or operating budgets for short-term goals. An effective budgetary control system involves preparing budgets, continuous comparison of actual to planned performance, and revising budgets as needed. Installing such a system requires determining objectives and constraints, and establishing an organization structure with a budget controller and committee responsible for the budget process.
Taxation of Royalty - By CA Parul Aggarwalparul mittal
In Post BEPS era and with unprecedented technological advancement, the characterization of royalty payments and its subsequent taxation has gained paramount importance. With this, the tax structures have also undergone sea change. This presentation discusses the treaty interpretation through analysis of various case laws relating to characterization and taxability of royalty payment.
The document discusses the definition and taxability of royalty under Indian income tax law and tax treaties. Royalty is broadly defined and includes payments for the use of intellectual property as well as technical knowledge and experience. Royalty income is generally taxable at a rate of 10-15% under tax treaties if not attributable to a permanent establishment, and at normal tax rates if attributable to an Indian permanent establishment. The document also provides illustrations to analyze whether payments constitute royalty or business income.
Key Takeaways
Analysis of definitions in Income tax act and treaties
Taxability under the act and treaties
IRoyalty vs. Business income
Illustrative Cases
Judicial Precedents
This book provides clause-by-clause analysis of the Finance Bill, 2021. All complex provisions have been explained with illustrations which helps the readers to comprehend the new provisions, in a simplified manner. This book covers analysis on the following:
Direct Taxes
Indirect Taxes (Including GST & Customs)
Corporate Laws
The Present Publication is the Latest Edition, authored by Taxmann’s Editorial Team, with the following coverage:
Tax Rates
Profits and Gains from Business or Profession
Capital Gains
Other Sources
Charitable Trusts
Deductions
TDS and Advance Tax
Return of Income
Assessments
Appeals and Dispute Resolution
Miscellaneous
Amendments Proposed under the GST Laws
Amendments Proposed under the Customs laws
Additional Infrastructure and Development Cess
Amendment under the Central Sales Tax Act
Amendments under the Customs Tariff Act
Amendments Proposed under the Corporate Laws
The detailed coverage of the book is as follows:
Tax Rates
Profits and Gains from Business or Profession
Capital Gains
Other Sources
The Government has enacted the CGST (Amendment) Act, 2018, the IGST (Amendment) Act, 2018, by publication in official Gazette to amend the respective GST Acts.
In this regard, we have captured major amendments in CGST Act, 2017 and IGST Act, 2017 for your perusal
Here we are with the Thirty fifth successive issue of our monthly ‘Missive’.
We trust you will enjoy reading this Missive, even while soaking in the contents. We would very much appreciate your feedback which consistently helps us in improving and upgrading the contents.
Thanks and regards,
Knowledge Management Team
How capital gain is to be computed when superstructure (building) less than 3...D Murali ☆
How capital gain is to be computed when superstructure (building) less than 3 years old and constructed on an old land owned for more than 3 years is sold - T. N. Pandey - Article published in Business Advisor, dated February 10, 2015 http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
This document discusses the taxation implications of technology transfer in India. It defines technology transfer and outlines the various types of intellectual property that can be transferred such as patents, copyrights, and trademarks. It also discusses how transfer of technology results in income that is taxed differently depending on whether it is classified as royalty, fees for technical services, or business profits. The document provides details on relevant sections of India's Income Tax Act regarding taxation of income from technology transfer and examines how double taxation avoidance agreements may impact taxation.
20 key suggestions of Tax Reform Panel to Simplify tax provisionsKunal Gandhi
The Tax Reform Panel provided 20 key suggestions to simplify India's tax provisions:
1. Provide legislative guidance on characterizing investments as capital assets or stock-in-trade to reduce litigation. Surplus on shares held over 1 year as capital assets would always be taxed as long-term capital gains.
2. Introduce a presumptive taxation scheme for professionals estimating income at 33.33% of receipts up to 1 crore rupees to simplify compliance.
3. Defer implementation of Income Computation and Disclosure Standards (ICDS) to allow further study of implications as they generate legal debates and increase compliance burden.
International and Domestic transfer Pricing Final Pradeep A
This document provides an overview of transfer pricing in India. It discusses key concepts like associated enterprises, international transactions, specified domestic transactions, and arm's length price. It outlines India's transfer pricing regulations and compliance requirements, including the computation of income based on arm's length pricing. It also covers penalties for non-compliance, the audit process, documentation requirements, and advance pricing agreements. Global developments around base erosion and profit shifting are also mentioned.
The Finance Bill 2012 proposes several amendments to the Income Tax Act regarding taxation of offshore transactions. Key points:
- Amendments to sections 9, 2(14), 2(47), and 195 clarify definitions of capital asset, property, transfer, and tax withholding obligations to cover indirect, offshore, and deemed transactions.
- Retrospective amendments intend to restate legislative intent but are criticized as substantially changing original provisions and validating past tax demands without possibility of refund.
- The Bill aims to tax transactions based on their economic effect rather than legal form, address loopholes highlighted in recent court cases, and clarify India's territorial tax jurisdiction.
This document summarizes a presentation on taxation of fees for technical services and royalties for non-residents. It defines fees for technical services and royalties under various models and laws. It discusses the source rules, scope of taxable fees for technical services, and how treaties may impact taxation. It provides examples of model treaty articles on fees for technical services and discusses situations where the fees may not be taxable such as when covered by other articles or in the absence of a permanent establishment in the source state.
The document discusses the legislative history and provisions related to presumptive taxation in India. Some key points:
1) Various sections like 44AC, 44AD, 44AE, 44AF were introduced over time to allow computing income on a presumptive basis for certain eligible businesses to simplify tax compliance.
2) Section 44AD was amended in 2009 to expand the scope of presumptive taxation to all businesses with a turnover up to Rs. 60 lakhs, except those covered under other sections.
3) The new provisions allow deeming income at 8% of gross receipts/turnover for eligible assessees engaged in eligible businesses. Various case laws have upheld the constitutional validity
This document is the Integrated Goods and Services Tax Bill, 2017. It contains 25 definitions that are relevant for understanding and implementing the Integrated Goods and Services Tax. Key terms defined include integrated tax, place of supply, export and import of goods and services, online information and database access services, and zero-rated supply. The bill aims to levy and collect tax on inter-state supply of goods or services by the Central Government.
This document discusses international transactions and transfer pricing regulations in India. It begins by introducing international transactions and defines them as transactions between two or more associated enterprises, where at least one enterprise is non-resident. It then discusses what constitutes a "transaction" and provides examples. It also discusses deemed international transactions where transactions between a resident enterprise and third party are deemed international transactions if there is a prior agreement between the third party and an associated non-resident enterprise. The document concludes by summarizing a key case related to deemed international transactions between two resident Indian companies.
This document provides an overview of international transactions and transfer pricing regulations in India.
It defines an international transaction as a transaction between two or more associated enterprises, where one or both parties are non-residents. International transactions can include purchase/sale, services, lending/borrowing, or other transactions affecting profits.
It also describes "deemed international transactions" - transactions between a resident enterprise and third party that are determined by an agreement between the third party and an associated non-resident enterprise.
The document analyzes key cases related to determining what constitutes an international transaction and the application of transfer pricing adjustments.
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
Taxation of services an education guideKarthik S Raj
The document provides an introduction and preface to the "Taxation of Services: An Education Guide" published by the Central Board of Excise and Customs of India on June 20, 2012. The guide aims to educate taxpayers and administrators on India's new "negative list" approach to taxation of services, which taxes all services except those specified in the negative list. It discusses the development of service tax in India and the need for the comprehensive reform. The introduction outlines the contents of the guide, including guidance notes on key concepts like the definition of service, taxability, the negative list, place of provision of services, declared services, exemptions, valuation and interpretation.
The document provides an overview of Limited Liability Partnerships (LLPs) under Indian law, including key aspects of the LLP Act 2008 such as incorporation, partners' relationships, taxation, foreign investment, and comparisons to other business forms. It discusses merits and demerits of LLPs, taxation implications on conversion to/from LLPs, and allows foreign investment in LLPs in sectors allowing 100% FDI.
The document discusses international taxation issues arising from retrospective amendments made to tax laws. Some key points discussed include:
1. A person who had never deducted taxes on computer software in the past now has to go back and undo those mistakes due to retrospective amendments, even though he was not aware of them previously.
2. There are concerns about the validity and impact of retrospective amendments, including on reopening of assessments, revision of orders, and rectification.
3. The amendments have widened the tax base by expanding the definition of royalty to include computer software, databases, and satellite transmission retroactively. This could lead to more litigation.
4. Issues around tax residency certificates, general anti-
The Economic Survey 2011-12 highlights India's GDP growth estimates of 6.9% for the current fiscal year, projected to increase to 7.6% in 2012-13. Inflation has slowed, food inflation declining from 20.2% to 1.6%. Exports grew 40.5% in the first half of the fiscal year. The budget aims to reduce the fiscal deficit from 5.9% to 5.1% of GDP for 2012-13 through measures like introducing a goods and services tax and raising funds through divestment.
Foreign exchange forward contracts allow companies to hedge currency risk by locking in an exchange rate for a future date. The key terms are the forward rate set today and the settlement date when currencies are exchanged. A forward contract can be honored, rolled over to a new date, or cancelled by taking an opposite position. According to accounting standards, any premium/discount from the forward rate is amortized over the contract period, while exchange differences are recorded in profit and loss on the settlement date.
This document discusses various aspects of inflation including definitions, types, measurement, causes and effects. It explains key inflation concepts like demand-pull and cost-push inflation. It also discusses the stages of inflation and inflation's relationship to GDP and currency valuation. The document provides examples of inflation rates in India and outlines some monetary and fiscal policy measures to control inflation.
Communication, email etiquettes, office ethics & time managementKarthik S Raj
This document provides an overview of effective communication, email etiquette, workplace ethics, and time management for accountancy professionals. It discusses the importance of communication, tips for effective communication including being a good listener, maintaining consistency, and having empathy. It outlines proper email etiquette including using a clear subject line, brevity, clarity, and courtesy. The document also discusses other modes of communication, workplace ethics, and balancing work responsibilities with studies. It provides tips for smart work and time management.
This document discusses e-payment of direct taxes in India. It explains that direct taxes such as income tax and corporate tax must now be paid online using net banking. Taxpayers can make payments from any location without visiting a bank branch by logging onto the Income Tax Department website and choosing "pay taxes online." They will then select their bank and complete the transaction, receiving an electronic receipt with a challan identification number that should be quoted on their tax return.
XBRL (eXtensible Business Reporting Language) is an open standard for electronic communication of business and financial data, using XML. It allows companies to store and efficiently publish financial reports by facilitating the preparation, analysis and exchange of business information between organizations. The document outlines the requirements for Indian companies to file financial statements in XBRL format with regulatory authorities like the Ministry of Corporate Affairs.
How to prepare presentations in MS Power point Karthik S Raj
PowerPoint is a presentation program developed by Microsoft that allows users to create slideshows with visual elements like tables, charts, pictures, and videos to aid in memory and engage multiple channels. It is commonly used for presentations but has received some criticism for overuse of flashy elements. Effective PowerPoint presentations treat the audience as most important, spread and move the message clearly, help the audience understand the presenter's point, use visuals and design as support rather than decoration, and are practiced before delivering to the audience. Tips for preparing PowerPoint include keeping backgrounds subtle, using bullet points over paragraphs, limiting transitions and colors, and checking for spelling and grammar errors.
Venture capital power point presentationKarthik S Raj
Venture capital involves investing in startup companies and small businesses with growth potential. It provides funding to new companies and helps them grow. Venture capital is high-risk but can provide high returns. It is typically invested in technology, biotech, or other innovative companies. Venture capital funds pool money from investors and then invest in ventures on their behalf. They provide capital as well as management assistance to the companies they invest in.
CDR is a method used by companies with outstanding debt obligations to reorganize the terms of debt agreements in order to achieve advantages like waiving interest, concessions in payments, and converting debt to equity. It allows a business to gain control of its finances and improve its credit rating with help from creditors. However, it can also place holds on new credit and negatively impact a company's public image. The CDR process in India involves a standing forum, empowered group, and CDR cell that work to restructure eligible corporate debts.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
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May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
Economic Risk Factor Update: June 2024 [SlideShare]
International Taxation
1.
2. he had never deducted taxes on
computer software....
he had planned well with expert
international tax advisors .....
Now he has to go back in time to undo all those
mistakes....which he never knew untill now
INTERNATIONAL TAXATION 11/04/2012
3. Authority for retrospective amendments ?
Exception rather than a rule
Proposed to nullify judicial decisions
in Guise of Clarificatory in nature
Nothing to indicate the intent when the law was implemented
No Circulars or mention in the memorandum while introducing
the provisions
1976- computer software ? Sattelite link etc.?
1962 – structuring of transactions with management control
etc.?
CIT vs. Mugneeram Bangur 57 ITR 299 (1965)(sale of shares –
does not result in sale of underlying assets)
Constitutional Validity? ITC case….out of court settlement
INTERNATIONAL TAXATION 11/04/2012
4. Re-opening of Assessment u/s 147?
M/s.K. Mohan & Co. (Exports) (Regd.) INCOME TAX APPEAL (L)
NO.2347 OF 2010: If the legislature amends the provisions of the
Act with retrospective effect, it cannot be said that there was
failure on the part of the assessee to disclose fully and truly all
material facts relevant for the purpose of assessment. (Bombay
High Court) (Weizmann Limited; Voltas 15 February 2012. order)
INTERNATIONAL TAXATION 11/04/2012
5. Revision u/s 263?
Hon’ble Supreme Court in the case of CIT vs Max India Ltd 295
ITR 282(SC), he submitted that the Hon’ble Apex Court in the said
decision in a 263 matter has held that subsequent amendment
even though retrospective will not attract the provisions of section
263.
Retrospective amendment not available on reasons recorded
date would not save reopening) IOT Infrastructure 235 CTR 313
INTERNATIONAL TAXATION 11/04/2012
6. Rectification u/s 154
ITO vs Bombay Dyeing& Mfg Company Ltd reported in 34 ITR
143(SC) : Held possible
INTERNATIONAL TAXATION 11/04/2012
7. Era of Continuous Litigation
Commitments given by PM
Impact on Investors view on India
Impact on Indian taxpayers
Disrespect to Judiciary
Transfer pricing 92C-5%+/- – not to affect assessments before
1-10-09
Disallowance u/s 40(a)(ia)- though held by court-only prospective
amendment
INTERNATIONAL TAXATION 11/04/2012
8. Hon’ble Supreme Court had ruled that transfer of shares of a
foreign company that indirectly held underlying Indian assets not
taxable.
The said decision is effectively reversed by amending the below
Sections retrospectively.
Section 9 of the Income Tax Act, 1961 (‘the Act’)
It is proposed to amend Section 9(1)(i) of the Act to clarify that
the expression “through” shall mean and include and shall be
deemed to have always meant and included “by means of”, “in
consequence of” or “by reason of”.
INTERNATIONAL TAXATION 11/04/2012
9. Section 9 of the Income Tax Act, 1961 (‘the Act’)
Further, it is proposed to amend Section 9(1)(i) of the Act to
clarify that an asset or a capital asset being any share or
interest in a company or entity registered or incorporated
outside India shall be deemed to be and shall always be
deemed to have been situated in India if the share or interest
derives, directly or indirectly, its value substantially from the
assets located in India.
INTERNATIONAL TAXATION 11/04/2012
10. Section 2(14) of the Act
• It is proposed to amend section 2(14) to clarify that ‘property’ includes and
shall be deemed to have always included any rights in or in relation to an
Indian company, including rights of management or control or any other
rights whatsoever.
Section 2(47) of the Act
• It is proposed to amend section 2(47) to clarify that ‘transfer’ includes and
shall be deemed to have always included disposing of or parting with an
asset or any interest therein, or creating any interest in any asset in any
manner whatsoever, directly or indirectly, absolutely or conditionally,
voluntarily or involuntarily by way of an agreement (whether entered into
in India or outside India) or otherwise, notwithstanding that such transfer
of rights has been characterized as being effected or dependent upon or
flowing from the transfer of a share or shares of a company registered or
incorporated outside India
INTERNATIONAL TAXATION 11/04/2012
11. Section 195 of the Act
It is proposed to amend provisions of Section 195(1) of the Act to
clarify that the said provisions will be applicable to all persons,
resident or non-resident, whether or not the non-resident has -
a residence or place of business or business connection in
India; or
any other presence in any manner whatsoever in India.
All the above amendments will take effect retrospectively from 1
April 1962 and will accordingly apply in relation to the
assessment year 1962-63 and subsequent assessment years.
Eliy Lily Case of SC had affirmed this
Vodafone of SC had expressed doubts on this
INTERNATIONAL TAXATION 11/04/2012
12. - What is substantial interest ( DTC had 50% or more value from assets
in India)
- Effect on transfer of shares of Parent Multinational companies say
Pepsi, Nike etc.
- Impact on India-Mauritius Treaty Capital Gains exemption post
amendment to Sec 9(i)
- VC transactions without change in control or management etc where
investment is for pure gains?
• Validation clause 113 : A validation clause introduced with respect to
demands raised on non-residents under above retrospective provisions
to protect against any question that tax was not chargeable on such
transactions on any ground and which shall operate notwithstanding
any judgment, decree or order of any Court or Tribunal or any
Authority
• Taxation of P Notes transactions
INTERNATIONAL TAXATION 11/04/2012
13. WIDENING OF TAX BASE-ROYALTY
Definition of royalty under section 9(1)(iv) expanded to cover: COMPUTER
SOFTWARE:
transfer of all or any rights in respect of any right,
property or information as mentioned in Explanation 2,
includes and has always included transfer of all or any
right for use or right to use a computer software
(including granting of a licence) irrespective of the
medium through which such right is transferred
Payment for Copyright and payment for Copyrighted
articles
Delhi HC Vs Karnataka High Court
Solid Works case of Mumbai ITAT
Pune ITAT after considering Delhi HC and Karnataka HC
Royalty Definition under Treaty provisions vs New
Amended Domestic law
Notification giving meaning to words not defined under
treaty (Sec 90(3)
INTERNATIONAL TAXATION 11/04/2012
14. WIDENING OF TAX BASE-ROYALTY
Definition of royalty under section 9(1)(iv) expanded to cover: DATABASE/
INFORMATION:
• To amend section 9(1)(vi) to clarify that royalty includes and
has always included consideration in respect of any right ,
property or information, whether or not
• (a) the possession or control of such right, property or
information is with the payer;
• (b) such right, property or information is used directly by the
payer;
• (c) the location of such right, property or information is in India
Database access all along held as not royalty
INTERNATIONAL TAXATION 11/04/2012
15. WIDENING OF TAX BASE-ROYALTY
Definition of royalty under section 9(1)(iv) expanded to cover: SATELLITE
TRANSMISSION/ ACECSS USING TECHNOLOGY:
To amend section 9(1)(vi) to clarify that the term “process” includes and
shall be deemed to have always included transmission by satellite
(including up-linking, amplification, conversion for down-linking of any
signal), cable, optic fibre or by any other similar technology, whether or
not such process is secret.
Satellite transmission or leased line access etc.
INTERNATIONAL TAXATION 11/04/2012
16. TDS DEFAULT – RETROSPECTIVE
AMENDMENT
Will it have affect on disallowance u/s 40(a)(ia)?
Can it be re-opened u/s 147 etc?
Effect of new provisions of Sec 201 on non deduction in case of Non
Resident payments
INTERNATIONAL TAXATION 11/04/2012
17. TAX RESIDENCY CERTIFICATE
A foreign taxpayer will be required to submit a Tax Residency
Certificate [TRC] obtained from the government of the country of
residence, containing the prescribed particulars, in order to be able to
claim the benefits of the tax treaty.
Indonasia has introduced similar Certificate of Domicile
What Benefits may not be available if TRC not provided :
- 10.51% vs 0% due to Make Available Clause in treaties
-Capital Gains exemption like Mauritius/ Singapore treaty
-10.51% Domestic law Vs 10% as per treaty
-Dual Residential status and applicability of Tie Breaker clause
INTERNATIONAL TAXATION 11/04/2012
18. TAX RESIDENCY CERTIFICATE
Transition Provisions:
- Before Budget 2012 receives Presidential Assent-Sec 294
-After Presidential Assent –till we get the certificate from respective
authority
-Practical Difficulties in obtaining this certificate
INTERNATIONAL TAXATION 11/04/2012
19. APAs introduced with effect from 1 July 2012. CBDT
empowered to enter into an APA with any person,
determining the ALP or specifying the manner in which ALP is
to be determined in relation to an international transaction
APA shall be binding on both the taxpayer and the Tax
authority for a period not exceeding five years except
If there is a change in law or facts or where APA obtained by fraud or
misrepresentation
Appropriate provisions made for modification of return,
assessment, extension of period of limitation, etc
consequent to conclusion of APA
CBDT given the powers to prescribe a scheme specifying the
manner, form, procedure and any other matters in respect of
APA
INTERNATIONAL TAXATION 11/04/2012
20. – No Threshold limits prescribed
– Rules to be notified , hope will not be delayed like
Safe Harbour rules
– To be inked with CBDT with Central Government
Approval –may be time consuming
– Not sure whether it is Unilateral or Bilateral
– Bilateral will avoid Double Taxation
– Any other method also acceptable other than the
prescribed 5 methods (start up loss and other
specific cases may be justified)
INTERNATIONAL TAXATION 11/04/2012
21. – Directorate may be in Delhi, Mumbai and Bangalore
– Only applicable for Tax payer signing APA
– Can be declared void ab initio if it is found it has
been obtained with fraud misrepresentation.
– To filed revised returns post signing APA
– Not sure of what would be the filing fees , in US it is
USD 50,000
– One has to be go for it based on Cost Benefit
analysis
– Non Appealable –it is a contract –one can opt to
sign or not to sign
INTERNATIONAL TAXATION 11/04/2012
22. KEY TRANSFER PRICING PROVISIONS
Explanation to be added to Sec 92B retrospectively from 1st June 2002,
to clarify inclusion of business restructuring or reorganization,
providing of guarantee, purchase or sale of marketable securities or
any type of advance, payments or deferred payment or receivable or
any other debt arising during the course of business; Inclusive
definition of the term ‘intangible property’ also provided
Safe Harbour
• +/- 3% safe harbour of the transfer price introduced w.e.f financial
year 2012-13
• Applicability of +/- 5% safe harbour on transfer price to all
assessment or reassessment proceedings pending before AO as on
1 October 2009
• Clarification - Assessee not entitled to the erstwhile benefit of +/-
5% safe harbour on arms length price as standard deduction
INTERNATIONAL TAXATION 11/04/2012
23. KEY TRANSFER PRICING PROVISIONS
Scope of transfer pricing provisions expanded w.e.f 1 April 2013
by including “specified domestic transaction” if aggregate value
of such transactions exceeds Rs 50 million
It is proposed to amend the Act to provide applicability of
transfer pricing regulations (including procedural and penalty
provisions) to transactions between related resident parties for
the purposes of computation of income, disallowance of
expenses etc. as required under provisions of sections 40A, 80-
IA, 10AA, 80A, sections where reference is made to section 80-
IA, or to transactions as may be prescribed by the Board, if
aggregate amount of all such domestic transactions exceeds
Rupees 5 crore in a year.
It is further proposed to amend the meaning of related persons
as provided in section 40A to include companies having the
same holding company.
INTERNATIONAL TAXATION 11/04/2012
24. KEY TRANSFER PRICING PROVISIONS
o Retrospectively w.e.f 1 June 2002 TPO empowered to
examine any international transaction whether or not
referred by the AO
o Pursuant to above mentioned enhancement of powers
of TPO, AO not empowered either to assess or reassess
or pass an order enhancing the assessment or reducing a
refund already made for any assessment year closed
before 1 July 2012
o Penalty @ 2% shall apply w.e.f 1 April 2012 for non-
reporting of transactions in accountants report in form
3CEB
INTERNATIONAL TAXATION 11/04/2012
25. General Anti-Avoidance Rule (GAAR) introduced to deal with
aggressive tax planning involving use of sophisticated structures
It is proposed to introduce a new Chapter X-A in the Income
Tax Act, 1961 (‘the Act’) regarding GAAR. The said GAAR
provision starts with a non-obstante clause.
The GAAR provisions are applicable with effect from 1 April
2013 i.e. from Assessment Year (‘AY’) 2013-14 and subsequent
years.
In case the GAAR provisions are invoked by the Revenue
authorities, then the tax payer cannot seek tax treaty protection,
as GAAR provisions would override the tax treaties entered into
by India with other countries.
INTERNATIONAL TAXATION 11/04/2012
26. In an environment of moderate rates of tax, it is necessary that the
correct tax base be subject to tax in the face of aggressive tax planning
and use of opaque low tax jurisdictions for residence as well as for
sourcing capital. Most countries have codified the “substance over
form” doctrine in the form of General Anti Avoidance Rule (GAAR).
In the above background and keeping in view the aggressive tax
planning with the use of sophisticated structures, there is a need for
statutory provisions so as to codify the doctrine of “substance over
form” where the real intention of the parties and effect of transactions
and purpose of an arrangement is taken into account for determining
the tax consequences, irrespective of the legal structure that has been
superimposed to camouflage the real intent and purpose.
INTERNATIONAL TAXATION 11/04/2012
27. FEAR OF MISUSE OF GAAR
Internationally several countries have introduced, and are
administering statutory General Anti Avoidance Provisions. It is,
therefore, important that Indian taxation law also incorporate a
statutory General Anti Avoidance Provisions to deal with
aggressive tax planning. The basic criticism of statutory GAAR
which is raised worldwide is that it provides a wide discretion
and authority to the tax administration which at times is prone
to be misused. This vital aspect, therefore, needs to be kept in
mind while formulating any GAAR regime.
INTERNATIONAL TAXATION 11/04/2012
28. What Constitutes “Impermissible Avoidance agreement “
Main purpose of the arrangement is to obtain tax benefit and
meets any one of the 4 conditions:
-disproportionate rights or obligations
-misuse or abuse of domestic tax provisions
-lack of commercial substance or
-done for non-bonafide business purposes
-Presumed to be obtaining tax benefit unless proved otherwise
INTERNATIONAL TAXATION 11/04/2012
29. What Constitutes “Lack of Commercial Substance “
•if its substance / effect is inconsistent with its form,
•Involves round trip financing,
•an accommodating party and
• elements that have the effect of cancelling each other and disguised
• transactions or asset location or transaction place or residence is
only for obtaining tax treaty benefit.
•Factors like period of holding, payment of taxes (directly or indirectly)
and exit route are not relevant to determine commercial substance
(last minute planning vs from inception)
INTERNATIONAL TAXATION 11/04/2012
30. It is proposed that the Assessing Officer shall make a
reference to the Commissioner for invoking GAAR and
on receipt of reference the Commissioner shall hear
the taxpayer and if he is not satisfied by the reply of
taxpayer and is of the opinion that GAAR provisions
are to be invoked, he shall refer the matter to an
Approving Panel. In case the assessee does not
object or reply, the Commissioner shall make
determination as to whether the arrangement is an
impermissible avoidance arrangement or not
INTERNATIONAL TAXATION 11/04/2012
31. Once the arrangement is held to be an impermissible avoidance
arrangement then the consequences of the arrangement in
relation to tax or benefit under a tax treaty can be determined
by keeping in view the circumstances of the case, however,
some of the illustrative steps are:-
•(a) disregarding or combining any step of the arrangement.
•(b) ignoring the arrangement for the purpose of taxation law.
•(c) disregarding or combining any party to the arrangement.
•(d) reallocating expenses and income between the parties to
the arrangement.
•(e) relocating place of residence of a party, or location of a
transaction or situs of an asset to a place other than provided in
the arrangement.
•(f) considering or looking through the arrangement by
disregarding any corporate structure.
•(g) re-characterizing equity into debt, capital into revenue etc
INTERNATIONAL TAXATION 11/04/2012
32. • GAAR vs SAAR
• GAAR Worldwide
• Will domestic GAAR have Treaty Override
INTERNATIONAL TAXATION 11/04/2012
33. MEASURES TO COUNTER UNACCOUNTED
MONEY
Mandatory tax return filing in relation to foreign assets
Resident taxpayers having any asset (including any financial
interest in any entity) located outside India or signing authority
in any account located outside India mandatorily required to file
a return of income
Similar to US Asset reporting
• Sch FA in Tax Forms : details of foreign bank accounts (peak
balance) , financial interest in any entity, details of immovable
property or other assets located outside India (cost). This should
also include details of any account located outside India in which
the assessee has signing authority (peak balance).
To be reported even by Resident but Not Ordinary
INTERNATIONAL TAXATION 11/04/2012
34. MEASURES TO COUNTER UNACCOUNTED
MONEY
Time limitation for reassessment
Time limit for initiation of reassessment of
income/ wealth in a case where income/ wealth in
relation to any asset (including financial interest in
any entity) located outside India has escaped
assessment extended to 17 years from the end of
the relevant financial year
Provision to be effective retrospectively from
1-4-12
INTERNATIONAL TAXATION 11/04/2012
35. Meaning assigned to a term used in Double
Taxation Avoidance Agreement (DTAA)
• It is proposed to amend Section 90 of the Act to
provide that any meaning assigned through
notification to a term used in an agreement but not
defined in the Act or agreement, shall be effective
from the date of coming into force of the agreement.
It is also proposed to make similar amendment in
Section 90A of the Act.
• The amendment in section 90 will take effect
retrospectively from 1st October, 2009 and the
amendment in section 90A shall take effect
retrospectively from 1st June, 2006.
INTERNATIONAL TAXATION 11/04/2012
36. Foreign Oil Companies
• Income of Foreign Oil company supplying
crude oil and collecting money in Rupees
exempt u/s 10(48)
37. Obtaining Lower Tax certificate u/s
195
• Effective 1 July 2012, payment to non-
residents by specified persons or in specified
cases (to be notified) to require an application
to be made to the Tax Officer for
determination of withholding tax, irrespective
of whether such payment is taxable in India or
not
38. Due Date of 30 Nov for TP cases
th
• Earlier only for corporate TP cases the due
date was 30th Nov, now for all TP cases
Corporate and Non Corporate the due date
will be 30th Nov
39. Cases Reversed Due to Budget
Changes
• Software not Royalty:
-2010) TaxCorp (INTL) 2977 (ITAT-BANGALORE) M/s
VELANKANI MAURITIUS LTD Vs DEPUTY DIRECTOR OF
INCOME-TAX
• -2008) TaxCorp (INTL) 2818 (ITAT-DELHI) LUCENT
TECHNOLOGIES INTERNATIONAL INC Vs DEPUTY
COMMISSIONER OF INCOME TAX
40. Cases Reversed
• Satellite/Definition of process
• -(2008) TaxCorp (INTL) 2419 (AAR) ISRO
SATELLITE CENTRE ISAC Vs DIRCTOR OF
INCOME TAX –satellite services
41. Cases Reversed
• (2009) TaxCorp (INTL) 2663 (AAR) FACTSET
RESEARACH SYSTEMS INC Vs Director of
Income Tax – subscription for database
• Infosys –Bangalore ITAT-Bandwith downlink
charges
42. CA Ramachandran M
CA Ramanand Suhas Koparty
Rupesh Srivastav – Tax Corp
Sudeep
Karthik SR