India is increasingly making an impact as a G20 member by standing-up to global multi-nationals. The long-running dispute with Vodaphone is well known and just recently another multinational had its assets in India frozen for a while. Obviously retrospective tax legislation is not ideal and tax law needs to be clear. Then again multi-nationals should not avoid tax / VAT at the costs to local business. As the recent G20 leaders’ declaration stated (paragraph 50), profits ought to be taxed in the country where the economic activity produces the profit and where value is added (not artificially shifted around).
Watch out tax fans to see if the UK Treasury plays catch-up with the Indian Revenue.
Tax Barrister, Accountant