india tax residence certificate update
TRANSCRIPT
INDIA TAX RESIDENCE CERTIFICATE UPDATE
The Finance Minister P Chidambaram, after presenting the Finance Bill 2013, in the Indian Parliament said that the Tax Residence Certificate (TRC) issued by the Foreign Government will be accepted as proof of residency for availing benefits under tax treaties. He further stated that "the additional information can also be asked by the Government but the TRC issued by the foreign Government will be accepted as a certificate of residence." The Tax Residence Certificate shall be necessary but not a sufficient condition for claiming any relief under the agreement referred to therein. The stock market reacted negatively, which led to the Indian Ministry of Finance issuing a press release, admitting that the language used in the drafting was not appropriate and that it would be suitably addressed when the Finance Bill is taken up for consideration.
This put to bed the nervousness of investors. It has to be reiterated that circular 789 dated April
13, 2000 issued by the Central Board of Direct Taxes remains valid, pending the on-going renegotiations of the Double Taxation Avoidance Agreements between the two Governments under the auspices of the Joint Working Group.
Intuit would also emphasise that proposed amendments for General Anti Avoidance Rules (GAAR) is now enacted under Chapter X of the Indian Income Tax Act 1961 and will be effective as from 1st April 2015. It is imperative that adequate substance be inserted in your Mauritius structure so as to be able to withhold change, if any. If you need any assistance to review your structure, please email us on [email protected]
For further details, we propose a conference call with our Partner, Mr. Piyush Bhandari at the telephone number +9840702727 or with email address: [email protected]