Deloitte: Tax Service Line survey

By Rob Starr, Content Manager, Big4.com

The Indian tax landscape has been in limelight internationally due to the landmark ruling of Supreme Court in Vodafone case followed by the retrospective amendments along with the proposed General Anti-Avoidance Rules. In this context Deloitte has released a survey report that gauges the pulse of global organizations on how these organizations perceive the current investment climate in India from a tax perspective. It also focuses on how tax policy could be streamlined to make it more efficient.

Deloitte’s survey includes 5 critical aspects – Intermediate Holding Company (IHC), Permanent Establishment (PE), Foreign Tax Credit (FTC), General Anti-Avoidance Rules (GAAR) and Tax Litigation.

According to the survey, even after the recent concerns over India-Mauritius treaty and approach of Indian tax authorities towards IHC investments, 62% of the respondents still consider investment through IHC in India as the most viable option. Despite the general perception that such investments are made for tax benefits, about 51 per cent of the respondents considered factors other than reduction in tax cost as crucial for deciding IHC jurisdiction. Around 63 per cent of the participants consider Singapore to be a favourable jurisdiction for investments into India. The survey shows that lately, Mauritius has been losing luster as a preferred IHC jurisdiction for investments into India due to unfavourable and aggressive posture by Revenue Authorities and lack of certainty surrounding it.