India Tax Insights (April-June 2014)
This first edition presents insightful articles, interviews and thought leaderships to aid business leaders have the most relevant information to make decisions. This issue primarily focuses on tax administration in India.
Highlights of the India tax and controversy survey
An accompaniment to EY’s global 2014 Tax risk and controversy survey, the India survey highlights the thoughts and perceptions of tax and finance executives based in India on tax risk and compare them to global result.
For further perspectives into our survey, visit http://www.ey.com/IndiaTaxRiskControversySurvey2014
In conversation with Jeffrey Owens, Senior Tax Policy Advisor to the Global Vice Chair of Tax, EY
Jeffrey Owens, Senior Tax Policy Advisor to the Global Vice Chair of Tax, EY and former Director, Centre for Tax Policy and Administration, OECD, Paris, talks to us on the growing pressures on the tax administrations and how they are responding to the challenges. Mr. Owens talks of how tax administrations are now moving towards developing a more behavioural response to compliance: shifting towards prevention rather than just detection of non-compliance and the structural changes that tax administrations are adopting to combat the challenges posed by the increasingly global and interconnected economic environment.
This article by D.K. Srivastava, our Chief Policy Advisor, highlights the significance of tax gap analysis by the Centre and State governments in India which could prove to be valuable for augmenting revenues, designing tax reforms, simplifying tax structures, reducing compliance costs, and improving the efficiency of tax administration.
Rajendra Nayak, Partner, International Tax Services discusses the need to introduce alternate dispute resolution mechanisms in India to achieve the objective of making the tax regime non-adversarial. He opines that the Government of India could consider the option of including an arbitration clause in its tax treaties with countries with which it has significant investment and trade relations.
Vijay Iyer, Tax Partner and National Leader – Transfer Pricing profiles the new regime for resolving transfer pricing controversies in advance and the challenges the tax administration should be prepared for, as the regime evolves.
Journey across decades- Tax administration in India
This section provides a synopsis of Indian tax administration. It traces the milestones in the journey of tax administrative reforms in India, including the recent establishment of Tax Administration Reform Commission. The article also provides a summary of the recommendations from the recently released first report of the Commission. Read more
Income and Direct Tax collection from 1918 to 2014 (in INR crore)
Source: ‘A Journey Across Three Centuries’, Ministry of Finance, Government of India
Milka Casanegra (1990) states that “in developing countries tax administration is tax policy.” No tax policy can be implemented without commensurate improvements in tax administration. While India has progressed in tax administration, to be able to keep pace with the demands of the fast changing, global environment, there is still a long way to go. In the last two years particularly, the accusations against the Indian tax administration for its arbitrariness, undue aggressiveness and the resultant rise in disputes, has pushed policymakers to deliberate on the next generation tax administration reforms. The latest outcome of these deliberations is the Report of the Tax Administration Reform Commission (TARC).
News on the go
What has been some of the important global tax developments worldwide? We offer an insightful snapshot. Read more
- OECD project on BEPS and some country-specific actions
- Brazil Supreme Court ruling on the incompatibility of Controlled Foreign Corporations regime with tax treaties
- Tax treatment of virtual currency transactions
- Payment by Australian distributor for acquiring rights to commercially exploit a computer software regarded as “royalty”
For further details, access our India Tax Library.
Our key economic indicators captured at a glance!
For detailed infographics, download the report.