Top India investment and restructuring strategies & Recent regulatory updates
November 2015
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© 2015 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Top India investment strategies and restructuring considerations
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© 2015 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
A foreign company operating in India should be mindful of the following-
Indian tax implications and reporting requirements even if foreign company’s India sourced income is exempt under relevant treaty
Taxation of employees of foreign company sent to India on secondment
PE exposure on account of deputation of expatriates
Scope of Royalty/ Fee for technical services- Tax implications
Non-Compliance - not only attracts penalty, but may have prosecution exposure
Tax risk management- Long pending litigations- High litigation costs and negative impact on the brand value
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© 2015 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Important regulatory updates
Reduction in corporate tax rate over the next four years from 30
to 25 per cent
Advance Pricing Rulings in Transfer Pricing provided in few cases – APA’s for 5 years ahead
and 4 years roll-back can be obtained
Clarity on taxation of indirect transfer provisions
General Anti Avoidance Rules deferred till March 2017
Rate of tax on royalty and FTS payments to non-residents
reduced from 26 % to 10.5%
Stringent penalties on Directors /Key personnel on non –
compliance under the new Companies Act
Clarity on retrospective amendment - Vodafone
litigation settled
Spending on Corporate Social responsibility (CSR) – 2% of profits
Audit Rotation - Game changer for KPMG in India
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© 2015 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Important regulatory updates
Modi Government – Intent to minimize litigation – New AAR
benches, GAAR deferred, Internal mandates to expedite and close
litigations
10 Income Computation Disclosure Standards notified – Applicable
from FY 2015-16
Notices to FPIs requiring them to pay MAT which traditionally has not
been applied to foreign funds
Goods and Services Tax (‘GST’) – Lok Sabha passes constitutional
amendment bill for GST
New law to deal with Black money stashed by residents abroad
Increased focus of CBDT on non-compliances of return filing, tax
withholding and information collection for foreign remittances
FDI in LLP where 100% FDI is permitted under automatic route
and there are no FDI related conditions
ECB now permitted for working capital purposes under automatic
route subject to fulfilment of conditions
Modified Special Incentive Package Scheme to boost the ‘Electronic
System Design and Manufacturing’ sector
Thank You
Amit JainDirector, Deal Advisory, M&A (India Center of excellence)KPMG LLP | 3975 Freedom Circle drive I Santa Clara, California, USA 95054Direct: +1 (408) 367-4145 | Mobile: +1 (408) 930-5063| [email protected]