Details

Titel

India's MAT: The government is listening

Ist Teil von

• International tax review, 2015-05

Ort / Verlag

London: Euromoney Institutional Investor PLC

Erscheinungsjahr

2015

Quelle

Business Source Ultimate【Trial: -2024/12/31】【Remote access available】

Beschreibungen/Notizen

• The minimum alternate tax (MAT) was born of an intention for large corporates to pay a minimum level of tax even if tax incentives effectively reduced their liability to zero. Technically the provision - section 115 JA on the Income Tax Statute 1961 - applied to all taxpayers including foreign portfolio investors (FPIs), formerly referred to as foreign institutional investors (FIIs) and foreign private equity firms structured as corporate entities. Taxpayers had long contended that MAT was intended to apply only to domestic companies. The Finance Bill 2015 (Budget 2015) included the following clarification from Indian Finance Minister Arun Jaitley: "To rationalise the MAT provisions for FIIs, profits corresponding to their income from capital gains on transactions in securities that are liable to tax at a lower rate shall not be subject to MAT". After the Budget, there was a crescendo of voices saying the clarification on FPIs was ambiguous, with many predicting that the clarification would lead to more litigation in future.