New Indian tax rules could hit UK companies

Britain’s biggest companies may have to revise their tax planning after India
proposed controversial new tax laws.

The new laws could see a foreign company with management presence in India
considered tax resident in the country, with global revenues taxed at 25%.

Ernst & Young
partner Pranav Sayta told
that the “ambiguous” proposals could hurt foreign
investment in the region.

Another expert suggested that India could go back on its current tax treaties
in place with the UK.

“India is gearing up to renege on these tax deals,” said one expert.

India has taken a more aggressive tone on tax issues in recent years, with
Vodafone still fighting a multi-billion pound case, appealing a an earlier
decision in the courts which found it must pay $2bn on its $11bn acquisition of
local mobile group Hutchison Essar.

Further reading:

Vodafone appeals after losing $2bn
Indian tax case

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