This edition examines a favorable tax ruling for foreign communications companies operating in Taiwan, interpret proposals in India's Finance Bill 2012, and other tax developments in Asia Pacific.
Welcome to the 10th edition of APAC Tax Matters.
In this edition, we report on a favorable ruling from Taiwan, exempting foreign telecommunication companies from tax on roaming service revenues received from domestic Taiwanese telecommunication companies.
Our contribution from Malaysia also clarifies on the relief due to Malaysian residents for overseas taxes suffered.
Other good news comes from Hong Kong where we report on the cautious welcome given to the Inland Revenue Department's finalised practice note on advance pricing arrangements, whilst from Vietnam we report on new decrees issued by the government in respect of Value Added Tax and Corporate Income Tax which will broadly benefit many, if not all, taxpayers.
Whilst we also have welcome news from India in the form of a ruling allowing a deduction of interest paid by a Indian branch of a foreign bank to its head office, we also report on the far-reaching proposals contained in India's Finance Bill 2012, including the taxation of offshore asset sale transactions, amendments to the definition of "royalty", significant amendments to transfer pricing provisions to expand their scope, the introduction of an advance pricing arrangement regime and a general anti-avoidance rule.
Also of concern is our report from Australia in which we outline the government's intention to amend Australia's general anti-avoidance rule and for the amended rules to apply from 1 March 2012, possibly leaving recent or ongoing transactions open to challenge.
Further news from Australia concerns the government's release of draft transfer pricing legislation intended to confirm the highly contentious view that Australia's tax treaties provide a separate and unconstrained taxing power.
Lastly, and by way of advance warning, from China we have news of the choice of targets for tax selection inspection in 2012 and the key areas for inspection.
Chee Weng Lee
Managing Partner -Tax Markets,