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India Quarterly February-April 2012

  • Patience is a virtue

  • Why India should be sure about dual GST

  • Amendments to the India-Australia DTAA

  • India set to delay DTC, but likely to introduce CFC, GAAR & POEM early

  • Indian Revenue speaks out on record $8.9 billion adjustments

  • Why foreign investors should go treaty shopping when doing business with India

  • Indian court explains how to calculate tax holidays

  • Taxpayers cautiously await shift to negative list

    India’s positive list to determine which services are taxable is outdated, overly complex and in need of reform and companies are cautiously looking forward to the planned introduction of a negative list of services. Salman Shaheen looks at the ways in which the change will make life easier for taxpayers and finds out if there will be any pitfalls.

  • Top tips to prepare for IFRS

    The saga of IFRS in India continues to unfold. Deadlines for its introduction have been and gone. Many in the tax community say that, while IFRS is inevitable, it probably won’t surface until 2013. Joe Dalton offers insight into how taxpayers can prepare for its implementation.

  • India’s bargains on future of intangibles

    India, with its increasingly popular service industry is finding the subject of intangible assets ever more difficult to tackle. Indian specialists are involved in the UN’s transfer pricing project for developing countries with specific arguments on location savings and bargaining power, though the government has said it will not provide specific guidelines at this stage and intends to wait upon the results of the OECD’s project on the transfer pricing aspects of intangibles. Sophie Ashley looks at the issue of bargaining power in India and what it means in the debate on intangible assets.

  • Court sheds light on taxation of royalties

    Two recent rulings have highlighted the inconsistency of how India tackles the taxation of royalties. Gagan Kumar of Archer & Angel highlights the controversy surrounding the characterisation of payment for use of software as royalty or business profits.

  • Destination India

    India has taken big steps, and continues to do so, in simplifying the way taxation operates in the country. But with tax authority aggression still as prominent as ever and challenges in the characterisation of income, legal classification of investment vehicles, structure of investors, and the country’s high corporate tax rate as key issues to be aware of for those investing in India, Matthew Gilleard outlines the challenges to expect and how to navigate around them.

  • Industry focus: Private equity in India

    In the fourth in a regular series, Gautam Mehra and Nehal Sampat of PwC highlight the key challenges taxpayers face in key Indian industries. In this issue, the authors analyse the tax hurdles and opportunities in the private equity sector.

  • Why Singapore is the ideal holding location for India

    Allen Tan, James Choo and Justin Tan of Baker & McKenzie.Wong & Leow Singapore highlight some of the key features of Singapore’s tax regime which makes it an attractive holding and operating company jurisdiction for Indian multinationals that are looking to expand in Asia or even globally.

  • TP issues surrounding marketing intangibles

    It is uniformly accepted that transfer pricing in India is becoming more and more complex. The tax authorities often take stands on transfer pricing treatment, especially of marketing intangibles, that are diverse and aggressive when compared to the rest of the world. Rohan Shah, Ajit Tolani and Ashish Bhatnagar of Economic Laws Practice discuss some of the recent rulings on marketing intangibles from India and the best practice approaches that taxpayers can adopt to avoid scrutiny.

  • How to interpret nexus rule for India’s tax treaties

    The 2010 amendment to India-Finland tax treaty appears to make the scope of taxation of fee for technical services even more restrictive such that fee for technical services paid by Indian tax resident to Finnish tax resident for services rendered in Finland is not taxable in India. However, K Swaminathan of Lakshmi Kumaran & Sridharan provides six case studies that show the treaty actually enhances the scope rather than restricting it.

  • The challenges with the profit split method

    Vijay Iyer of Ernst & Young seeks to discuss some aspects of the profit split method (PSM) in Indian, situations in which PSM can be applied, and the approach and challenges in the application of PSM.

  • Why substance is key when using Mauritius

    The Indian tax authorities recently held in Ardex that taking advantage of a tax treaty by itself is not objectionable treaty shopping. Not every transaction that seeks to benefit from a treaty is equivalent to tax evasion. Ravishankar Raghavan of Majmudar & Co discusses the ruling and provides a few steps to demonstrate substance in intermediary locations including Mauritius.

International Correspondents