THE International Chamber of Commerce (ICC) would shortly submit a slew of
recommendations on tax and administrative reforms to India’s Finance Ministry to
perk up the country’s investment climate.
The recommendations cover
certain provisions of Finance Act 2012, direct tax code, goods and service tax
and PE litigation and income attribution.
ICC arrived at these
recommendations at meeting of International members of the ICC Commission on
Taxation and delegates from large Indian corporates and multinationals,
including tax professionals and investors from 12 countries.
An ICC
release quoted Theo Keijzer, Chairman, ICC Commission on Taxation as telling the
delegates that certainty and stability of tax policies was essential to
encourage foreign investment in India.
ICC’s Commission on Taxation also
expressed its desire to work together with the government of India to help shape
an optimal investment climate in India.
Mukesh Butani, Vice Chair, ICC
Commission on Taxation, said that “the indirect transfer of assets report
(Vodafone case) has been referred by the Finance Minister to the Prime
Minister’s office and I am confident given India’s desire to attract foreign
direct investment, ICC recommendations will be accepted”. Following the recent
tax bill levied by India on Vodafone, ICC produced a policy statement in which
it stressed that the use of retrospective changes in law creates great
uncertainty and concern for investors and should be avoided, the release says.
ICC India participated in making wide ranging recommendations on the
General Anti Avoidance Rules (GAAR) and Indirect Transfer Retrospective
amendments.
While discussing details of Finance Act 2012, participants
noted that it takes “two to tango” when negotiating Advance Pricing Arrangements
(APAs) and suggested that India takes this into account when entering into
bilateral agreements.
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