India: CBDT issues guidance on transfer pricing audit procedures
The Central Board of Direct Taxes (CBDT) in India has issued Instruction No. 3 of 2016 on 10 March 2016, with immediate effect as new guidance to provide guidance to Assessing Officers (AOs) in selecting cases for transfer pricing (TP) audits in
See MoreIndia: Finance Minister releases 2016 -2017 Budget
The Finance Minister of India presented Budget for 2016-17 to the Parliament on 29 February 2016. The main changes of the Indian budget for 2016/17 are summarized below: Corporate income tax: - No change in the corporate tax rate except for new
See MoreIndia: CBDT issues draft guidelines for determination of a company’s place of effective management
India's Central Board of Direct Taxes (CBDT) has issued draft guiding principles for determining if a company is a resident in India or has its place of effective management in India. The Finance Act 2015 amended the provisions of section 6(3) of
See MoreIndia: Government Press Release on phasing out the plan of deductions under the Income-tax Act
The Finance Minister in his Budget Speech for 2015 indicated that the rate of corporate tax will be reduced from 30% to 25% over the next four years along with the corresponding phasing out of exemptions and deductions. The Central Board of Direct
See MoreIndia: A taxpayer is entitled to foreign tax credit against the MAT liability
Recently, the Bangalore Bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of: DCIT v. Subex Technology Ltd. [ITA No.913 (B) /2013, the court held that, credit for tax paid in a foreign country would be available under Section 90
See MoreIndia: Progressive Refund Process, Exports of services
In India Exporters of services are now entitled to claim a refund of the unused central value added tax credit of service tax / duties paid with respect to the procurement of goods and services that are used for the export of output
See MoreIndia: No Transfer pricing adjustment when tax avoidance not possible
The Mumbai Bench of the Income-tax Appellate Tribunal in the case of: DCIT v. Tata Consultancy Services Ltd. (ITA no. 7513/2010), held that an Assessing Officer cannot “mechanically” refer a taxpayer’s international transaction to a Transfer
See MoreIndia Publishes Notification on Use of Arm’s Length Range and Multiple Year Data
Recently, the Central Board of Direct Taxes published 'Notification No. 83/2015' of 19 October 2015 revising the Income-tax Rules, 1962 in relation to the use of range and multiple year data. The Notification amends Rule 10B and introduces Rule
See MoreIndia: LOB clause under the India-Singapore tax treaty is not applicable to income taxed on an accrual basis in Singapore
Recently the Rajkot Bench of the Income-tax Appellate Tribunal in the case of: Alabra Shipping Pte Ltd, Singapore v. Income Tax Officer- held that the benefit of the India-Singapore income tax treaty was not to be denied to the taxpayer by
See MoreIndia: Minimum Alternate Tax not applicable to foreign companies without a PE
A press release was issued on 24 September 2015 stating that, with effect from 1 April 2001, the minimum alternate tax (MAT) provisions will not apply to a foreign company if that foreign company is a resident of a country that has concluded a tax
See MoreIndia: High Court Decision on Transfer Pricing Comparability
The High Court of Bombay issued its decision in the case of: CIT v. Garware Polyester Ltd on 23 June 2015. The decision concerns a situation where the scope of work accepted by the associated enterprise (AE) agent is wider than that of a comparable
See MoreIndia: High Court Rules on Use of Multiple Year Data and High-Profit Comparables
Recently, the High Court (HC) issued its decision in the transfer pricing case of Chrys Capital Investment Advisors (India) Pvt. Ltd v. DCIT (ITA No. 417 of 2014) on the usage of multiple year data and high-profit comparables on 27 April 2015. The
See MoreIndia: Interest on tax refund taxable as business income under the India-UK tax treaty
Recently, the High Court in the case of B.J. Services Company Middle East Limited held that the interest earned on an income tax refund is taxable as business income under the India-UK tax treaty where the debt claim in respect of which interest
See MoreCanada-India: Social Security Agreement entered into force
A Social Security Agreement between Canada and India enter into force from 1st August 2015 that was signed on 6th November 2012. It also effects from the same date of entry into
See MoreIndia: Delhi Tribunal allows use of multiple-year data for purposes of determining arm’s length price
In the case of DCIT v. Innodata Isogen India Pvt. Ltd. , the Delhi Bench of the Income Tax Appellate Tribunal upheld a decision of the Commissioner of Income Tax (Appeals) to allow the taxpayer to use multiple-year data in determining the arm’s
See MoreIndia: Transfer Pricing Adjustment For Interest-Free Loan to Related Party
Recently, the Income-tax Appellate Tribunal upheld an interest adjustment on a loan that the taxpayer advanced to a related entity In the case of: Soma Textile & Industries Ltd. v. ACIT. Here the tribunal found that the comparable uncontrolled
See MoreFATCA Agreement Signed between United States and India
India and the United States have signed a Foreign Account Tax Compliance Act (FATCA) agreement on 09 July 2015. This is a Model 1 Agreement. Under this reciprocal agreement, financial institutions in India will report the information required under
See MoreIndia: High Court affirms that comparables must be functionally similar
In the case of: CIT-I v. DSM Anti Infectives India Ltd. ITA No. 116 of 2014 the Punjab and Haryana High Court confirmed a judgment of a tax appellate tribunal that certain companies selected in a search for comparables in a transfer pricing analysis
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