News

NEW DELHI, SEPT. 2: THE Direct Taxes Code Bill 2010, presented in the Lok Sabha, has introduced controlled foreign company (CFC) rules, This will create a reporting and tax requirement in respect of as sets held abroad.

The Bill has also sought to introduce General Anti Avoidance Rule (GAAR) to curb aggressive tax planning in a moderate tax regime.

It has also aligned the concept of residence of company with the tax treaties by introducing the concept of ‘place of effective management.’

This is intended to ensure that a top multinational company, having an occasional board meeting in India, is not considered as a resident Indian company which would subject its global profits to taxation.

The DTC Bill also proposes the introduction of advance pricing agreement for international transactions.

Moreover, the DTC Bill has restored the existing position of treaty, overriden with a rider that the provision of Anti Avoidance Rules, Branch profit Tax and controlled Foreign Companies will still be applicable.