Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 March 31 deadline is getting near. How to save income tax with tax loss harvesting?
 45-day MSME payment rule: Impact and details of Section 43B(h) explained
 Small savings schemes that offer tax benefits of up to Rs 1.5 lakh under section 80C
 RE-OPENING OF CORRECTION WINDOW FOR MAY 2024 CA EXAMINATIONS
 Powerful Upgrades, Tally 12+1 months renewal Plan and Connected Services for your growing Business - March 2024
 How innovative solutions can help fix the Sec 43B conundrum for MSMEs
 Income Tax dept asks many individuals to explain high value transactions of FY20-21 as Updated ITR deadline nears
 Release Notes for TallyPrime and TallyPrime Edit Log Release 4.1 | What s New!
 Deadline to file updated ITR FY20-21 ends on March 31: Details on additional tax
 4 tax-planning mistakes to avoid this season
 ITR 2024: Here are 8 ways by which senior citizens can save on taxes this year

CBDT chairman in Mauritius to plug tax avoidance loopholes
February, 11th 2008

Barely 20 days ahead of the presentation of the Union Budget, Indias top taxman is now in Mauritius on an official visit.

Sources in finance ministry said that the governments decision to send the chairman of the Central Board of Direct Taxes (CBDT) to Mauritius just ahead of the Budget is to find ways to plug the loopholes of the Double Taxation Avoidance Act (DDAA) and increase tax collection, apart from getting specific inputs for possible transfer pricing reforms.

CBDT chairmans visit could be related to transfer pricing reforms.

His visit could also be attributed to the CBDTs chasing of many mega deals where no tax was paid in India. 
His visit could also be attributed to the CBDTs chasing of many mega deals where no tax has been paid in India. CBDT chairman R Prasad, who left for Mauritius on Wednesday last will be back in India on Tuesday.

In fact, India has been mounting pressure on Mauritius to amend Double Taxation Avoidance Act (DDAA), in an attempt to increase tax collection from many corporate transactions, engineered by non-Mauritius residents out of that island country. Sources said that an amendment to DDAA is on the card.

According to DDAA between India and Mauritius, capital gains arising out of sale of shares is taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Thus a Mauritius-based company will not pay tax in India if it sells shares of an Indian company, and because there is no capital gains tax in Mauritius, the company will pay no tax at all.

The governments attempt to increase the tax kitty is indispensable in an election year as the social expenditure of the government is bound to increase substantially.

The Indian tax authority is following many mega deals where no capital gains tax has been paid. I feel, CBDT chairman R Prasads visit to Mauritius could be related to that. If the CBDT ensures receiving capital gains tax in mega deals like Hutch-Vodafone, the tax collection will increase further which, in turn, will help the government raising its social budget. The visit could be related to governments attempt to initiate reforms on transfer pricing as well, sources said.

Transfer pricing refers to the pricing of goods and services within a multi-divisional organisation, particularly with regard to cross-border transactions. The TP issues have become relevant in India as many MNCs are now setting up major operations in the country.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting