India to tax guarantee fees: outbound acquisitions under threat
November 02, 2011
Sophie Ashley - TPW
The Indian government has said guarantee fees, paid by Indian companies in the acquisition of foreign assets, fall into the income tax net because they are a cost to the company.
RN Dash, the director general for transfer pricing at the Indian Revenue Authority, said recently: "We have brought such [corporate] guarantees under the transfer pricing net of the Income Tax Act. We have identified a number of intangible transactions; and corporate guarantees, given to associated enterprises for acquiring companies abroad, are one of them.”
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