DTAA
Concerns and Challenges
K.K. Sen
DIT(IT)II,Mumbai
Playfield
Litigation
Competing roles of industry and tax
administration
The global standards
Fast maturing democracy
International share in tax base
The world is flat and hot
The New Normal
Transponders
Live telecast
Off--shore sale
Off
Internet
Transmission
Peering
Optical fiber
Ether
The New Normal
Knowledge pool services
Borrowed services
Intangibles
Exchange of information
Secrecy vs. sovereignty
International Tax Rules: Objectives
National wealth maximizationmaximizationgetting fair share of revenue from
cross border transactions
Tax equity or fairnessfairnessinability to maintain same standard of
fairness on non residents
Economic efficiency
optimal investment decision making
Revenue’s concerns
Tax evasion
Tax avoidance
Tax planning
Role of Tax Havens
Tax deferral
Why?
Industry- Optimal tax efficient
Industrystructuring and aggressive tax
planning
Revenue-Protection to legislative
Revenueintent
Industry’s concerns
Inefficient administration of
provisions of section 195,197,163
Myopic interpretations
Investigation on mere mistrust or
stereotyping without adequate
ground
Blind exercise of antianti-avoidance
measures
Challenges:The New Regime
DTC, GAAR, Branch Profit Tax,
Controlled Foreign Company
(CFC)Rules
Tax Treaty vs.Domestic tax law
GAAR an alternative to regular
philosophy of assessment: guidelines
critical
Concept of residence: Place of
effective management
Challenges:
Preserve domestic source income and yet
sustain robust foreign investment
Horizontal equity between domestic &
foreign source income
Prevent perpetual deferral
Substance over form rule of interpretation
Forced Disclosure of tax avoidance
schemes
Thin Capitalization Rules
Judicial Evolution
Azadi Bachao
Vodafone
Aditya Birla Nuvo
Scrutiny
Exchange of information
Residence in low tax /no tax
jurisdictions
Transfer Pricing
Thank you so much