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SALARY REIMBURSEMENT NOT SUBJECT TO WITHHOLDING TAX AS FEES FOR TECHNICAL SERVICES: RULES TRIBUNAL

In a recent ruling, the Income Tax Appellate Tribunal, Delhi (“Tribunal”) while differentiating the rulings in Centrica India Offshoreand Northern Operating Systems ruled that reimbursement of salaries of the ex-patriate employees of the Indian company to its foreign parent under a salary reimbursement agreement cannot be considered as Fees for Technical Services (“FTS”) and hence… Continue reading SALARY REIMBURSEMENT NOT SUBJECT TO WITHHOLDING TAX AS FEES FOR TECHNICAL SERVICES: RULES TRIBUNAL

ALIBABA SINGAPORE NOT A CONDUIT, ELIGIBLE TO TAX TREATY BENEFITS: RULES HIGH COURT

In a recent decision, the Division Bench of Bombay High Court (“HC”) upholding the decision of the Income Tax Appellate Tribunal, Mumbai (“Tribunal”) dismissed the appeal filed the tax department. The tax department had alleged that the taxpayer was a conduit and acted solely on the basis of its indirect parent and therefore was denied… Continue reading ALIBABA SINGAPORE NOT A CONDUIT, ELIGIBLE TO TAX TREATY BENEFITS: RULES HIGH COURT

Tribunal emphasizes importance of TRC: Upholds eligibility of Mauritius based CIV for tax treaty benefits

In a recent ruling, the Income Tax Appellate Tribunal, Delhi (“Tribunal”) recognized and upheld the importance of the Tax Residency Certificate (“TRC”) and held that a Mauritius-based Collective Investment Vehicle (“CIV”) registered as a Foreign Portfolio Investor (“FPI”) by the Securities and Exchange Board of India (“SEBI”) is entitled to the benefits provided under the… Continue reading Tribunal emphasizes importance of TRC: Upholds eligibility of Mauritius based CIV for tax treaty benefits

INCOME FROM PRE-CLINICAL LABORATORY SERVICES NOT TAXABLE IN INDIA: RULES TRIBUNAL

In a recent ruling, the Income Tax Appellate Tribunal, Bangalore (“Tribunal“) ruled that income derived from providing pre-clinical laboratory services to Indian clients should not be subjected to taxation in India as it does not fall within the ambit of Fee for Included Services (“FIS”) under the Double Taxation Avoidance Agreement between India and the… Continue reading INCOME FROM PRE-CLINICAL LABORATORY SERVICES NOT TAXABLE IN INDIA: RULES TRIBUNAL

NET WINNINGS FROM ONLINE GAMES: CALCULATION PRESCRIBED BY CBDT!

Recently, the Central Board of Direct Taxes (“CBDT”) has issued rules to calculate “net winnings” in case of online games and issued guidelines in relation to the same for further clarification. As background, the Finance Act, 2023 introduced a new provision under the Income Tax Act, 1961 (“Act”) – Section 194BA (applicable from July 1,… Continue reading NET WINNINGS FROM ONLINE GAMES: CALCULATION PRESCRIBED BY CBDT!

THE SAP CONUNDRUM: FACT OR LAW?

Recently, the Supreme Court in the case of Sap Labs India Private Ltd. v ITO, held that in transfer pricing matters, a High Court cannot be precluded from examining the correctness of the determination of the arm’s length price by the Tribunal in an appeal on the ground that it does not raise a substantial… Continue reading THE SAP CONUNDRUM: FACT OR LAW?

OVERSEAS DIRECT INVESTMENT OVERHAULED: STEP IN THE RIGHT DIRECTION!

On August 22, 2022, the Department of Economic Affairs, Ministry of Finance issued the Foreign Exchange Management (Overseas Investment) Rules, 2022 (OI Rules) in supersession of the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (Erstwhile FEMA 120) and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property Outside India)… Continue reading OVERSEAS DIRECT INVESTMENT OVERHAULED: STEP IN THE RIGHT DIRECTION!

ANALYZING REPORTING REQUIREMENTS FOR TRANSFER OF SHARES

Presently, foreign investments in India are governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (“NDI Rules”), the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 (“Reporting Regulations”) (in respect of the payment and reporting requirements for foreign investments) and the consolidated foreign direct investment policy circular of 2020… Continue reading ANALYZING REPORTING REQUIREMENTS FOR TRANSFER OF SHARES

NEGOTIATING THE FOUNDER EMPLOYMENT AGREEMENT

One of the key contracts drafted during a fund raise is an employment agreement for the founder of the company undertaking an equity fund raise. Much has been spoken about the term sheet and the shareholders agreement; however interestingly, a number of times, the employment agreement gets executed only after the agreement to buy the… Continue reading NEGOTIATING THE FOUNDER EMPLOYMENT AGREEMENT

NEW AMENDMENTS TO RELATED PARTY TRANSACTIONS

On November 9, 2021, the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 (RPT Amendments) have been notified by SEBI to further tighten the provisions governing related party transactions (RPT Provisions). By way of a brief background, the proposals for further amendment of the RPT Provisions were made under the Report of the… Continue reading NEW AMENDMENTS TO RELATED PARTY TRANSACTIONS