Looking inward and outward – ITR’s India Special Focus launched

Click here to read all the chapters from ITR's India Special Focus.

Against the backdrop of the pandemic, India’s Prime Minister Narendra Modi announced the 2022 Union Budget, coinciding with the 75^th year of an independent India.

Modi’s 25-year roadmap lays out a plan to make India a self-reliant digital giant, including a digital banking push and the introduction of a digital rupee using blockchain.

In Dhruva Advisors’ article, our authors analyse the changes announced in the 2022 Union Budget, including alterations to input tax credit, and improved options for taxpayers who want to update their tax returns.

The Budget also introduces changes to customs laws, in order to limit the impact of a Supreme Court judgment with which the government clearly disagrees. And finally, Dhruva Advisors identifies a disturbing trend towards retrospective amendments from the Indian government, which leaves taxpayers in an uncertain position and could increase litigation.

Meanwhile, our authors from KNAV have penned an outward-looking article unpicking how the Global Anti-Base Erosion (GloBE) model rules under the OECD’s pillar two policy will interact with the OECD/G20 Inclusive Framework’s BEPS project.

KNAV provides a clear explanation of the computation mechanism to be used for calculating the amount of top-up tax, if any, that companies need to pay to reach the 15% global minimum tax threshold.

Our authors also discuss the charging mechanisms of two domestic rules: the Income Inclusion Rule (IIR) and the Undertaxed Payment Rule (UTPR), as well as the difficulties these pose when interacting with existing tax treaty frameworks.

Finally, KNAV offers some concrete advice for tax directors: with pillar two planned to come into effect in 2023, what should multinational enterprises do to prepare? Differences in timings across jurisdictions where the company operates could cause issues, as could differing transfer pricing models adopted by constituent entities within the parent group.

Being aware of these challenges in advance will put in-house tax directors, as well as advisers, in a strong position to take an active, rather than reactive, approach to ensuring compliance, mitigating risk, and saving costs.

At an exciting time both for India and for the global tax landscape, we hope that you enjoy hearing from our top thought leaders in our second India Special Focus.

Click here to read all the chapters from ITR's India Special Focus.