INDIA GERMANY TAX TREATY
MNCs in India fret as US yet to ratify global tax deal
Tax experts say the international tax treaty, which Republicans strongly oppose and requires a two-thirds majority in the US Senate to pass, faces significant challenges. Without US ratification, meeting the OECD tax deal's implementation conditions to reshape the global tax system becomes extremely difficult. The international tax treaty's implementation needs acceptance by 30 jurisdictions and the inclusion of the headquarters jurisdictions of at least 60% of the most profitable multinationals; given that many of these businesses are located in the United States, US participation is critical to attaining this level.
Will new FM support global effort for 'billionaire tax': Congress asks ahead of swearing-in
Congress questions if India's new finance minister will support the global 'billionaire tax' effort and if the prime minister will side with common people or billionaires ahead of the swearing-in ceremony.
The European Union in five figures
European Union: The 27-nation bloc stretches from the chilly Arctic in the north to the warmer Mediterranean in the south, and from the Atlantic in the west to the Black Sea in the east.
Work overnight for FPI tax papers: Sebi tells big four firms
At a meeting on Tuesday, the Indian capital market regulator has told the accounting biggies in no uncertain terms to generate the mandatory 'confirmation certificate' overnight so that offshore funds managers can repatriate the money from the sale of stocks here to other international markets the very next day.
View: Don't eat the rich, it'll hurt the rest
Many countries have attempted to tax the rich through these taxes without success. They fundamentally militate against simple economic logic - disproportionate amounts are spent on their collection, and evasions are easy. The taxes also disincentivise enterprise and lead to flight of capital, affecting growth.
FPIs take out Rs 22,000 crore from equities in May amid poll jitters, Chinese mkt outperformance
Foreign investors have pulled out a massive Rs 22,000 crore from Indian equities so far this month, due to uncertainty surrounding the outcome of the Lok Sabha elections and outperformance of Chinese markets.
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Ghar Wapsi, a start up the right path
India's regulatory regime has also facilitated shifts in both directions. Outbound investments were made easier by regulators clarifying what constitutes bona fide business when a startup intends to relocate abroad. Inbound investments also face more clarity over transfer of assets, apart from overall lower sectoral restrictions on foreign investments.
Maximizing Tax Benefits: A guide to claiming foreign tax credits in India
The Foreign Tax Credit (FTC) alleviates double taxation on income earned in one country, crucial in today's globalized world. Tax Treaties distribute taxing rights between source and residence countries, aiming to prevent double taxation. Navigating FTC complexities requires careful planning, documentation, and awareness of key challenges and strategies.
Nepalese citizens' plea puts I-T in dock for invoking Black Money Act
Two Nepalese citizens have challenged the Indian Income Tax Department's invocation of the Black Money Act against them, arguing that they are tax residents of Nepal, not India. The case raises questions about how the law applies to foreigners from countries with double tax avoidance treaties with India. Specifically, the case highlights issues concerning Nepal, where citizens can move freely in and out of India without passports due to a "Treaty of Friendship" between the two countries.
FPIs withdraw Rs 17,000 crore from equities in May so far on political uncertainty
This was way higher than a net withdrawal of Rs 8,700 crore in the entire April on concerns over a tweak in India's tax treaty with Mauritius and a sustained rise in US bond yields
India is a democracy in its own right, says German envoy Philipp Ackermann
"I think it would be futile to discuss whether India is like a western or German democracy because it's simply not because the American democracy is different from Germany. You have to develop a democracy in your own environment that reflects the people and how they work," says German ambassador to India Philipp Ackermann
FPIs withdraw over Rs 5,200 crore in April so far amid tweaks in tax treaty with Mauritius
Foreign investors dumped domestic equities worth over Rs 5,200 crore in April so far on concerns over tweaks in India's tax treaty with Mauritius, which would now impose higher scrutiny on investments made here via the island nation.
BIPAs vs FTAs: Balance of trade rests on finding an equitable equation
Both types of trade agreements have their merits and demerits. The government has to find the right mix to ensure investments that come into the country benefit the domestic economy in the long run.
War and trade: As Iran-Israel conflict intensifies, India’s trade vulnerability rises
The Israel-Hamas conflict had already inflated freight cost from $1,000 to $6,000. Now with Iran directly entering the conflict, India’s MSME sector is staring at an economic bloodbath as freight costs are likely to rise to $9,000-12,000, say small traders.
Waning Mauritius FPI flows may limit tax treaty change impact
The share of funds domiciled in Mauritius in the total FPI equity assets under management (AUM) dropped to 5.61% in March 2024 compared with 14.53% five years ago, the data from NSDL showed. Consequently, Mauritius-based funds become the fourth largest investor by geography after the US(41.7%), Singapore (7.64%), and Luxembourg (7.15%).
BDO India may set up GCC through a joint venture in Noida
The global capability centre (GCC), which will be set up in Noida, will look to recruit up to 5,000 people within the next 3-4 years, marking the latest instance of professional services firms establishing or expanding capability centres in India.
CBDT ready to address queries on Mauritius DTAA update
The clarification follows concerns by tax experts over the agreement opening past investments to scrutiny from tax authorities at the time of exit following the protocol, which was inked on March 7. A key concern expressed by experts is about reopening of past cases in view of the amended provision.
I-T department issues clarification regarding India-Mauritius tax treaty
The department said that the Protocol pertaining to the amendment is yet to be ratified and notified under Section 90 of the Income-tax Act, 1961. Until this Protocol comes into force, any queries or concerns regarding the amendments will be addressed as and when necessary, said the I-T department.
Mauritius issue begins to haunt foreign investors as FPIs pull out nearly $1 billion from Indian stocks
India and Mauritius have agreed to a protocol to alter a double taxation avoidance agreement (DTAA) stating that tax relief cannot be for the indirect benefit of residents of another country. As a result, all FPIs will have to examine whether they have enough commercial rationale to be based in Mauritius when the tax scrutiny happens.
Amended India-Mauritius tax treaty will not be applied retrospectively: Report
The new provisions in the treaty include a principle purpose test, which will be used to judge whether tax benefits under the treaty will apply to investments or not, according to the text of the treaty released by India's foreign ministry.
Can taxation treaty amendment lead to sizable reduction in flows from Mauritius? Deloitte’s Rajesh Gandhi explains
Rajesh Gandhi from Deloitte India explains the implications of including Mauritius in the PPT requirement, affecting investments pre-2017. Uncertainty looms over treaty benefits and potential challenges for entities choosing Mauritius for non-tax reasons.
Should investors worry about India-Mauritius tax treaty amendments? Punit Shah answers
There is another provision like principal purpose test or MLI which further requires that the FPIs or any other investors which are based in Mauritius need to have a commercial rationale or a justification to be organised or to be based in Mauritius.
India, Mauritius sign protocol to amend tax treaty; principal purpose test introduced
Tax experts said a new article has been added to the protocol "Article 27B Entitlement to Benefits". The amended protocol was signed on March 7 and made public now.
PMO asks commerce ministry to examine model text of investment treaty
The Prime Minister's Office has directed the commerce ministry to review the existing model text of bilateral investment treaties (BIT) to enhance the ease of doing business. Currently, only seven countries have accepted this model, with many developed nations expressing concerns, particularly regarding dispute resolution provisions.
Tesla begins making cars in Germany for export to India this year: Sources
Tesla has initiated the production of right-hand drive cars at its Germany plant for export to India later this year, according to sources familiar with the matter. A team from Tesla is expected to visit India soon to explore potential sites for a local manufacturing plant, which would require an investment of around $2 billion. India recently reduced import taxes on certain electric vehicles if manufacturers invest at least $500 million in the country and start production within three years, a move that benefits Tesla.
Royalty rate under Spain DTAA notified
The notification holds importance especially in view of the recent Supreme Court judgement in the case of Nestle wherein it was held that the Most favoured Nation clause is not auto-executory. "The notification ensures availability of the benefit of lower Tax Rate with respect to Royalty income & FTS under the India Spain Tax Treaty," Pranav Sayta, Partner & Leader International Tax and Transaction Services, EY India said.
Mauritius to amend DTAA with India
The amendment, which is in sync with the ongoing global tax agreement, will discourage existing source-based tax exemptions claimed by the companies and will make it difficult for them to abuse the tax treaty purely for treaty shopping. The Base Erosion and Profit Shifting rules under 'pillar two' model are crafted to ensure large MNCs pay a minimum level of tax on income arising in each jurisdiction they operate in.
India’s FTA partners should keep in mind huge market being offered to them: Goyal
Commerce Minister Piyush Goyal emphasized that countries seeking Free Trade Agreements (FTAs) with India should recognize its vast market and business potential. He assured fair negotiations, considering India's interests. The UK's Minister Lord Ahmad highlighted growing bilateral trade and the importance of their trade agreement. Germany's Tobias Lindner emphasized the potential benefits of the India-EU trade agreement. These discussions come as India negotiates FTAs with the UK, Oman, and the EU, aiming for fair and balanced agreements that consider India's economic growth and opportunities.
NRIs in the US: Can the India-US tax treaty help you save more on your investments?
Understanding the residential status is crucial for NR taxpayers in India to determine their scope of taxable income and reporting obligations. Taxation is limited to income earned within the country, with different rates depending on the Act and tax treaties.
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