Indian Tax Conference Urges More Multinational Tax Agreements

by Mary Swire, Tax-News.com, Hong Kong

28 April 2003

At an International Tax Conference organised by the Associated Chambers of Commerce last week, experts on taxation advised that it would be to India's advantage to enter into more multilateral, as opposed to bilateral, tax treaties in future years.

Other recommendations which emerged from the conference included the introduction of statutory anti-tax avoidance measures such as controlled foreign company legislation if there is judged to be a propensity for Indian firms to seek out offshore tax havens. It was suggested that the tax treaties should be structured for the benefit of foreign firms located in India, rather than domestic firms trading within the country.

The conference was told that emphasis should be placed on ironing out the imbalances of the international taxation system in order to eradicate the incentive to shift money into more tax friendly jurisdictions. The most effective way to achieve this is the use of efficient anti-treaty-shopping rules which are designed to prevent large scale revenue losses, the experts advised.

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