CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Tax Disputes Have Damaged India's Image

Tax Disputes Have Damaged India's Image

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

03 October 2013


Retrospective changes to India's tax laws "will have an adverse impact on the investment flow into the country," the head of pharmaceutical giant Sanofi has said.

Christopher Viehbacher told reporters that the ongoing row over Vodafone's alleged tax liabilities in particular had "undermined the image of India." Retrospective reform of the Income Tax Act threw into doubt a Supreme Court ruling that Vodafone was not eligible for a USD2.2bn bill in back taxes and penalties in connection with its 2007 acquisition of Hutchison Essar. The two sides continue to inch toward conciliation talks, but no agreement has yet been reached on the issue.

Of the changes, LiveMint quotes Viehbacher as having said: "The underlying principle anywhere in the world for centuries [was] the person who makes the gain pays the tax. Now you are saying that the person who pays for the asset [will] have to pay the tax even though someone else makes the gain. This unheard of in the world. There should be justice to the transactions that [are] done. All these rules will have an adverse impact on the investment flow into the country."

Finnish mobile phone manufacturer Nokia revealed this week that the Indian tax authorities had frozen its assets and bank accounts, just days after it is believed that the company asked for help in settling a tax dispute. Nokia successfully appealed against the decision in the Delhi High Court, and its accounts were duly unfrozen.

In spite of this action, Government has in recent months seemed keen to stress that it wants to provide a suitable mechanism for the resolution of tax disputes with foreign companies operating in India. In July, Jesudasu Seelam, India's Minister of State (Revenue), said that the Government had already begun to amend existing legislation with this goal in mind. Initiatives include changes to the Advance Rulings system and the introduction of an Advance Pricing Agreement regime.

TAGS: compliance | tax | investment | business | tax compliance | India | tax avoidance | law | multinationals | legislation | tax planning | revenue statistics | tax reform | penalties | Tax | Tax Evasion

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »