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Changes, Challenges and Controversies in Corporate Law

Advance Pricing Agreement

Date posted: Saturday 8 August 2015
Laws:

Transfer pricing has been the bone of contention between the tax department and MNCs as the two sides have divergent views on the pricing structure of the Indian subsidiaries. The issue of transfer pricing has generated much heat in India involving MNCs operating here such as Cairn, WNS and Nokia. Disputes relating to transfer pricing between Multinational Companies (“MNCs”) and Revenue Department is a major area of litigation for resident and non-resident taxpayers. The concept of Advance Pricing Agreement was introduced in July, 2012 with the introduction of Section 92CC in the Income Tax Act, 1961 (“IT Act”). Under Section 92CC, companies could enter into an Advance Pricing Agreement (“APA”) with tax authorities for determining the arm’s length price or specifying the manner in which the arm’s length price will be determined for the next five years. Seeking to further reduce litigations related to transfer pricing, the ‘roll back’ provision under the APA was notified in October, 2014 that enabled companies to enter into APA with tax authorities for the previous four years. However the rollback provisions could not be implemented because of absence of rules. In March, 2015, the CBDT introduced rules for rollback provisions of APA. Four months after the rollback norms were notified, the Central Board of Direct Taxes (“CBDT”) signed first rollback unilateral advance pricing agreement (APA) on 3rd of August, 2015. This article will take you through the rules for rollback provisions of APA and the details of the press release regarding the signing of the first rollback APA.


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Registered Valuer

Date posted: Saturday 1 August 2015
Laws:

With the introduction of the Companies Act, 2013 (“New Act”), many new concepts have been added in Corporate Law. One such new introduction is the concept of Registered Valuer. While, Companies Act, 1956 (“Old Act”) did provide that valuation of assets in various circumstances was required to be done by a Chartered Accountant, now, the New Act requires such valuation to be done by a Registered Valuer. With the insertion of the concept of Registered Valuer, the responsibility as well as liability of the person conducting the valuation has increased manifold. The various provisions of the New Act relating to the Registered Valuer have been explained under this article.


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Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015

Date posted: Saturday 25 July 2015
Laws:

Last week, we covered the summary of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (“Black Money Act”). The Black Money Act is applicable to Residents other than not ordinarily resident in India who have undisclosed foreign income/assets. The Central Board of Direct Taxes (“CBDT”) has, on 2nd July, 2015 notified the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 (“Black Money Rules”) for calculating foreign assets. The value of the foreign assets, including immovable property, jewellery and precious stones, archaeological collections and paintings, shares and securities and shares in unlisted firms abroad will be calculated at the fair market value. The rules contain seven forms including those which have to be filled by persons, while declaring the undisclosed assets outside the country. This article will provide you with an overview of these rules, which includes the method of calculation of fair market value of foreign assets.


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The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

Date posted: Saturday 18 July 2015
Laws:

Do you possess Black Money? Grab your chance to come clean! The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (“Black Money Act”), has been notified on 26th May, 2015, with stringent provisions on tax, interest, penalty and prosecution for having illegal funds stashed abroad. The government has, however, offered a one-time opportunity to individuals to declare their undisclosed foreign assets and incomes and avoid penal action. For those wanting to come clean, there would be a compliance window in two parts – to declare assets and to pay 30% tax and 30% penalty. Once the compliance window closes, anyone found having undeclared overseas wealth would be required to pay 30% tax, 90% penalty, resulting into an outflow of 120% of the asset value and face criminal prosecution, which may result into a rigorous imprisonment of 3 years to 10 years. This article will provide you with an overview of the key provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.


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Gujarat New Industrial Policy-2015 for Start-ups

Date posted: Saturday 11 July 2015
Laws:,

India’s start-up space has started buzzing in the past 5 years. Technological start-ups have been focusing on development and introduction of new technology which can be transformed into new products, processes which bring in new solutions. In order to encourage the youth of the state to explore their innovative ideas and to motivate them to follow through these ideas, the Government of Gujarat has come out with a new Industrial Policy providing various incentives to the start-ups in Gujarat. The primary mission of the Industrial Policy includes innovation, start-ups and technology transfer. It plans to support 2500 persons for a period of 5 years. This article will provide you with a summary of Industrial Policy of Gujarat for 2015 relating to the incentives to start-ups.


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