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India’s Finance Act 2015: What You Need to Know

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By Tracie Sloop Frost

In May, President Pranab Mukherjee gave his assent to Prime Minister Narendra Modi’s first full budget. The Finance Act, part of the 2015 India Budget, addresses several areas of concern for foreign investors, but falls short of clarity in many respects.

Specifically, the Finance Act addresses the definition of tax residency for companies, applicability of minimum alternative tax provisions, deferral of the general anti-avoidance rules, a reduction of withholding tax rate on royalties and fees for technical services and an increase in the services tax.

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China, India & Vietnam: Setting Up in Asia’s Investment Hotspots – New Issue of Asia Briefing Magazine

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Cover 250 x 350The newest issue of Asia Briefing magazine, titled “China, India & Vietnam – Setting Up in Asia’s Investment Hotspots“, is out now and available as a complimentary download in the Asia Briefing Bookstore.

Contents:
  • Comparing Asia’s FDI Caps and Restrictions
  • Setting up an Office in China, India and Vietnam
  • China, India & Vietnam Tax Comparisons

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ESDM Industry Primed for India’s Growing Electronics Market

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By Dezan Shira & Associates

Editor: Nishant Dixit

India’s hardware industry is not as strong as its world-beating software industry. Domestic manufacturing capacity is weak – as much as 65 percent of local demand in the electronics market is met by imports. Despite this, Prime Minister Narendra Modi has stated that he would like India to hit net zero imports in electronics by 2020. How can India achieve this ambitious goal?

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India: Your China Plus One?

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By Dezan Shira and Associates

Editors: Nishant Maddineni and Rainy Yaoindiachinapin

During his 14-16 May trip to China, Prime Minister Narendra Modi will attempt to put a dent in India’s US $37.8 billion trade deficit with China. Chief ministers from Gujarat, Karnataka and Maharashtra will also be in the country to attract investment into their states. Modi and his support cast may face a tough sell when China compares India to Southeast Asian countries, but the economic relationship between China and India is changing in important ways. Neither China nor India can afford to accept the status quo.

The headlines will focus on large bilateral trade and investment deals; the local media report that Modi is set to win US $10 billion in deals from Chinese President Xi Jinping. While the importance of these bilateral trade and investments deals should not be understated, the real impact of Modi’s trip to China will be felt by the private sector. Modi’s ability to change the way businesspeople in China think about India is the key to his trip’s success.

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The Importance of Payroll Confidentiality in India

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By: Dezan Shira & Associates

Editor: Nishant Maddineni

Payroll confidentiality is difficult to maintain in Indian workplaces. As in most countries, well-managed companies take extra care to make sure the payroll information of their employees is confidential. In India, however, there are additional challenges for multinational businesses attempting to maintain payroll confidentiality. Payroll support services have consequently become a business-critical function for many small and medium sized enterprises (SMEs) in India.

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The Implications of India’s Minimum Alternate Tax (MAT) for Foreign Investors

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By Dezan Shira & Associates
Editor: Nishant Dixit

The general optimism over India’s foreign investment climate under the business-friendly leadership of Narendra Modi is starting to fade away as the country institutes major tax demands on foreign investors.

In April, over 100 Foreign Portfolio Investors (FPI) were served tax notices requiring them to pay the Minimum Alternative Tax (MAT) which traditionally has not been applied to foreign funds.

The controversy over MAT is ongoing as it has already appeared in three major cases: Vodafone (US$2.5 billion tax bill), Nokia (US$340 million), and Cairn Energy (US$1.6 billion). The most recent MAT related tax demands could be as high as US$8 billion.

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Managing Your Accounting and Bookkeeping in India – New Issue of India Briefing Magazine

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Cover 250 x 350The new issue of India Briefing magazine, titled “Managing Your Accounting and Bookkeeping in India“, is out now and available as a complimentary download in the Asia Briefing Bookstore.

Contents
  • Ind-AS: Preparing for India’s New Accounting Standards
  • Complying with India’s Tax Filing Requirements
  • Remitting Profits from India: Procedures & Regulations for Foreign Businesses

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New Foreign Trade Policy to Back-end Export Targets

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By Adam Pitman
International Business Advisory Manager, Dezan Shira & Associates 

Make in India. Digital India. Skill India. The list of slogans for the government’s economic initiatives is ever expanding. This public relations effort remains critical for the government, which needs to reshape how foreign businesspeople perceive India to increase foreign investment. However, many local businesspeople are concerned that the government has not implemented more measures to support its bold sloganeering.

The Modi administration’s first Foreign Trade Policy, unveiled on April 1, represents a pragmatic step forward in this regard. Much like the admiration’s first budget, unveiled on February 28, the policy targets critical industries with useful reforms and incentives. Perhaps more importantly, however, the trade policy has sought to back-end the government’s ambitious goals.

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