Companies Reconsidering Investment In India Over Tax Dispute
There are reports that foreign direct investment in India could drop significantly as other companies fear that they may be subject to paying large sums of Capital Gains Tax if the Indian tax authority succeed in their case against Vodafone. Taxand Malaysia comments on the effect this judgement may have on future corporate activity within India.
This case has the potential to open doors for other tax authorities across Asia looking to target offshore corporate activity. If India succeed in Court, then these countries may re-evaluate the way they want companies to disclose their offshore deals. Some countries have already changed the way in which transactions proceed in their jurisdiction. China in particular has tightened its rules and is taking a more aggressive stance on income made from offshore assets.
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