India, US Considering Framework For Resolving Tax Rows
by Mary Swire, Tax-News.com, Hong Kong
30 December 2013
India and the US could unveil details of a deal designed to resolve more than 100 outstanding tax disputes as early as February.
An unnamed Finance Ministry official told India's Economic Times that the two sides had "finalized the broad contours" of a mutual agreement procedure (MAP). Numerous discussions on the issue are said to have taken place since Indian Prime Minister Manmohan Singh called for an end to the impasse during his visit to the US in September.
According to the newspaper, the MAP would provide a mechanism for the speedy negotiation of acceptable settlements to tax rows. The cases in question could then be withdrawn from formal legal processes, "providing relief to companies and releasing tax revenue to the government."
It is hoped that the MAP will be used to clear a backlog of tax cases involving subsidiaries of US companies. An estimated INR80bn (USD1.29bn) in revenue remains at stake, with some cases having been on hold for over three years.
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