Tax developments – Top trends of 2015

Reflection of Woman Reading NewspaperWe at EY Tax wish all our Blog followers a great new year.

The year 2016 begins with a positive vibe with much anticipated tax developments to be introduced in the upcoming Budget with an aim to ease doing business in India. Government in 2015 clearly indicated that its focus was on increasing global participation in India by liberalising the FDI policies to energise the ‘Make in India initiative’.

We present to you the top 5 blogs that featured high at the reader’s barometer on EY’s India Tax Insights Blog

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Goods & Services Tax:

GST is undoubtedly a ‘Game Changer’ reform that the India INC is looking forward to, as the positive changes that the GST would bring, compared to the current tax regime, would pave a way for higher economic growth. GST Revenue Neutral Rate (RNR) was tabled in 2015, providing excellent insight on the frailties of the existing indirect tax structure, which fragments India.
The CEA’s recommendations on GST design were much talked about, namely the avoidance of rate bands in GST to ensure “Make in India” by “Making One India”.  Catch the top trending year end blog from Harishankar Subramaniam, Indirect Tax leader.

Mergers & Acquisition landscape in India:

EY’s latest Capital confidence Barometer published in October 2015 indicates that investor sentiment towards India is seeing a significant recovery, with the country’s deal market expected to improve. The Government’s pro-business stance and an increasingly promising economic outlook should foster a more benign landscape for inbound investment.
Trends suggest that PE investment into India remains upbeat although they continue operate in an increasingly uncertain tax & regulatory environment.  Amrish Shah, Transaction Tax Leader in his blog talks about the competitive M&A landscape in India and the promising developments.

EY recently authored a Master Guide on M&A in India, click here to order your copy today

Place of Effective Management (POEM):

The concept of POEM introduced to manage double taxations, broadly aligned with internationally accepted practices.
The POEM norms were introduced in the Finance Act, 2015 for determining corporate tax residency.  Indian Tax authorities are now closely scrutinising the functioning of overseas entities to determine sites where key management and commercial decisions are made.

Rajendra Nayak, International Tax Partner dwells deep on the applicability of the POEM norms.  Also read: ‘POEM- striking the right balance‘ authored in 2016.

Base Erosion and Profit Shifting (BEPS):

A rise in activism, media scrutiny and public interest about how businesses pay taxes has galvanized policymakers to action.  The OECD’s report reflected the view that current international tax standards have not have kept pace with changes in global business practices, the project will transform the global tax environment in which MNEs operate.

In October 2015, the OECD released final reports on the15 BEPS focus areas and recommended changes in key elements of the international tax architecture. India is an active Partner to the BEPS project and the upcoming Budget will clarify the application on recommendations. Rajendra Nayak in his blog, throws light on what would implementing the recommendations would entail for India.

IT Returns- perquisites to keep troubles away:

The Income Tax Department in 2015 launched the EVC (Electronic Verification Code) method of verifying your income tax returns. The taxpayer is required to choose the applicable form of the ITR carefully, depending upon the source of income earned, exemptions availed, foreign assets/income etc.

Another important change in the revised ITR forms is an option to furnish the Aadhar card number as a verification mechanism and get away with the earlier requirement of sending a signed copy of ITR V to the tax department. Amarpal Chandha’s blog highlighting the precautionary measures, was one of the most visited blogs for the year.

Follow us on Twitter @EY_India and join our Tax LinkedIn Group for regular updates on Budget 2016.
Visit our Budget Connect website to view our experts talk about Budget 2016 and register for upcoming webcast.


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