MUMBAI: Indian companies with a substantial presence in the US are making changes following new tax rules that came into effect after the passage of legislation late last year. Not doing so could mean a spike in taxes they have to pay in the US. While impact of new rules will vary, most companies could tweak shareholding patterns and customer contracts besides reducing management fees, interest and royalty payments to India from the US. “There is a huge impact for many Indian multinationals companies that operate in the US as they could see an additional tax of about 10% in the form of Base Erosion and Anti Abuse Tax (BEAT) for which they won’t even get a tax credit in India,” said Girish Vanvari, tax head, KPMG India. Tax experts said BEAT will work like minimum alternate tax (MAT) in India. Under BEAT, tax on normal profit will be 20% and 10% on adjusted profit, after disallowing payments like interest, management fees and royalties. Companies will have to pay the higher of the two. New US tax regulation includes a limitation on on interest deduction, which shall be limited to 30% of operating Ebitda (derived through certain specified adjustments),” said Maulik Doshi, partner, transfer pricing and transaction advisory, SKP Consulting. “Also, this would equally apply to existing debt / capital structures, which means there is no grandfathering provided for existing structures.
DRI busts smuggling rackets, seizes 31kg gold
VIJAYAWADA: The Directorate of Revenue Intelligence (DRI) seized 31.5 kg gold worth 13.3 crore in the last three days. DRI...