Indian Corporate Law International Taxation

Corporate law varies from one state to another. It is not the same everywhere. Rules also vary in matters of stocks, shares and bonds. One needs to adhere to the several legalities as a corporate entity. The Corporate Law Team of Lakshmikumaran&Sridharan advises multinational and Indian clients in various sectors such as power, oil & gas, telecom, infrastructure, real estate, automobiles, pharmaceuticals, chemicals, electronics, insurance and information technology.

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Corporate taxation has been volatile and dynamic in the past decade. Today, it is imperative to strategise business, bearing in mind the fundamentals of Indian tax laws rather than its provisions. Further, the new Direct Taxes Code has become operational from April 2012. New statutes often promise to be simpler and less burdensome. Yet, taxes are an item of dynamic cost or outgo to the assesse and tax payers strive to glean tax saving opportunities.

Such assistance may encompass domestic and international income-tax matters, inbound investment structuring, tax efficient mergers and acquisitions compliant with Indian corporate and tax laws, expatriate taxation and transfer pricing.

Corporate taxation in India is cumbersome and complex and has undergone several amendments. Several judgments overlap and contradict each other. Tax incentives like those for units setup in tax-free zones, export oriented units and special economic zones have given rise to multiple interpretations and disputes. Attorneys and accountants need in-depth knowledge of the provisions including the history of amendments and related judgments and work as a team to facilitate compliance through, inter alia, harmonious construction of complicated laws.

Analysis of International taxation

International taxation is the study or determination of tax on a person or business subject to the tax laws of different countries or the international aspects of an individual country’s tax laws.

Governments usually limit the scope of their income taxation in some manner territorially or provide for offsets to taxation relating to extraterritorial income. The manner of limitation generally takes the form of a territorial, residency, or exclusionary system. Some governments have attempted to mitigate the differing limitations of each of these three broad systems by enacting a hybrid system with characteristics of two or more.

Many governments tax individuals and/or enterprises on income. Such systems of taxation vary widely, and there are no broad general rules. These variations create the potential for double taxation (where the same income is taxed by different countries) and no taxation (where income is not taxed by any country). Income tax systems may impose tax on local income only or on worldwide income. Generally, where worldwide income is taxed, reductions of tax or foreign credits are provided for taxes paid to other jurisdictions. Limits are almost universally imposed on such credits. Multinational corporations usually employ international tax specialists, a specialty among both lawyers and accountants, to decrease their worldwide tax liabilities.

International Taxation takes in its sweep cross-border tax issues pertaining to double taxation, inbound investments, planning/structuring of intellectual property holding and so on.

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