• Service: Tax, Global Mobility Services, International Tax
  • Type: Regulatory update
  • Date: 4/7/2014

India - Proposed direct taxes law amendments, reimbursed data-processing costs 

April 7: The KPMG member firm in India has prepared reports on the following developments (read the April 2014 reports by clicking on the hyperlinks provided below):
  • Direct Taxes Code 2013 - India’s Finance Minister released the Direct Taxes Code 2013 for public discussion and comments. The government decided to revise the Direct Taxes Code after considering prior suggestions (there were 190 recommendations, of which 153 are now proposed to be accepted wholly or in part). Some of the key recommendations include an exemption from tax of income from indirect transfer for shareholders having “small shareholdings” (up to 5%); changes to the definition of the “place of effective management;” and “broad based” general anti-avoidance rules.

    Read an April 2014 report [PDF 464 KB]

  • Guidance for compliance regarding “international workers” - India’s Employees’ Provident Fund Organisation issued two circulars relating to compliance with respect to international workers.

    Read an April 2014 report [PDF 555 KB]

  • Reimbursed data-processing costs not taxable royalty under treaty with Belgium - The Mumbai Bench of the Income-tax Appellate Tribunal held that a payment made by an Indian branch to a foreign bank to reimburse the costs for data processing for software installed by the foreign bank is not a royalty under Article 12(3)(a) of the India-Belgium income tax treaty.

    The case is Antwerp Diamond Bank NV. Read an April 2014 report [PDF 333 KB]

  • Companies Act 2013 - Concerning corporate governance in India, the Companies Act 2013 may have broad implications for all companies—both listed and private companies. These final rules concern related-party transactions, depreciation accounting, inter-company loans and guarantees, appointment of directors, constitution of Audit Committee and other committees of the Board.

    Read an April 2014 report [PDF 316 KB]

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