Tax havens account for highest increase in FDI inflows

Source: The Economic Times, Jul 25, 2018

Foreign direct investment (FDI) inflows from tax havens such as Cayman Islands, the Bahamas and Liechtenstein have jumped leaps and bounds in the last one year, official data showed.

While FDI from Cayman Islands sharply rose 1,640% on year in 2017-18, in absolute terms the FDI inflow was $1.2 billion from $71 million in 2016-17, as per a Lok Sabha question answered by the commerce and industry ministry on Monday.

Bahamas showed a 475% rise in foreign inflows but the increase was from $0.24 million to $1.38 million in FY18. For Liechtenstein, the 392% increase was from $2.04 million in FY17 to $10.04 million last fiscal.

Overall, there was a 3.17% rise in FDI inflows into India at $44.8 billion in FY18 from $43.4 billion in FY17.

The FDI increase from Mauritius was 1.3% to $15.9 billion from $15.7 billion in FY17.

“Though Luxembourg, Switzerland and Ireland are not strictly tax havens, their favourable tax environment has given them this reputation,” said an expert on investment issues.

Luxembourg showed a 54.69% rise in FDI but that from Switzerland was flat at $514 million.

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India notifies rules for income tax computation for foreign firms

Source: The Economic Times, Jun 28, 2018

The government has notified rules for computation of income tax for foreign companies if they have place of effective management in the country. According to tax experts, it brings clarity on various aspects of the new place of effective management (POEM) regime.

Central Board of Direct Taxes (CBDT) has notified a mechanism for calculation of written-down value, and computation of brought-forward loss and unabsorbed depreciation.

It has said a company would continue to be treated as a foreign company even after it becomes resident in India. Read the rest of this entry »

Tax breather for e-commerce companies for three more months

download (1).jpgSource: The Economic Times, Jun 25, 2018

NEW DELHI: India proposes to defer the implementation of tax collection at source (TCS), a move that will give a breather to Amazon, Flipkart and other ecommerce service providers. “It has been decided to defer it for three months,” said a senior government official aware of the development.

Online platforms have to collect the tax from those selling goods on their sites while making payments for goods sold. The tax, designed as a measure to improve compliance by helping to track such transactions, was to come into effect on July 1. Ecommerce platforms, which have multiple sellers with small turnovers, have been wary of the provision, fearing an increase in the compliance burden.

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New direct tax code to benefit corporates, income tax payers

Source: LiveMint.com, May 13, 2018

New Delhi: Businesses and low-income earners will stand to gain the most from the new direct tax code that the government is working on, two people familiar with the matter said.

The proposed direct tax code, the draft of which will be ready by July, will take forward the government’s agenda of lowering corporate tax rate to 25% for all businesses and seek to give further relief to individual income tax payers.

The idea is to moderate tax rates for assessees without squandering the recent gains in revenue growth and tax base. Therefore, the proposed tax rate cuts will be incremental over a period of time as compliance and revenue collections grow. Between fiscal 2014 and fiscal 2018, income tax returns filed have risen over 80% to 68.4 million.

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Google tax may be broadened to cover non-digital MNCs

download.jpgSource: The Economic Times, May 08, 2018

MUMBAI: A budgetary proposal to tax multinationals with a substantial user base in India such as Google and Facebook is now being widened to include non-digital companies.

This could mean that any company that merely sells goods or services in India could see domestic taxes of up to 42% on their profits, said two people with direct knowledge of the matter.

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Central Board of Direct Taxes releases simplified ITR forms for FY19

download (3)Source: Business Standard, Apr 05, 2018

New Delhi: The Central Board of Direct Taxes (CBDT) on Thursday released a one-page simplified Income Tax Returns (ITR) Form-1(Sahaj) for the assessment year 2018-19, similar to that of the previous assessment year.

This initiative, the CBDT said, benefited around three crore taxpayers, who filed their return in this simplified Form.

Therefore, for the assessment year 2018-19 also, the CBDT released a one-page simplified ITR Form-1(Sahaj), which can be filed by an individual having income up to Rs 5 million and who is receiving income from salary, one house property / other income such as interest and so on.

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Cabinet clears tax pact between India-Iran

Source: The Economic Times, Mar 15, 2018

NEW DELHI: The Union Cabinet today cleared a double taxation avoidance agreement between India and Iran which will promote investment flow and curb tax evasion.

The agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income between India and Iran was approved by the Cabinet, headed by Prime Minister Narendra Modi, an official statement said.

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