Protection of the tax base has become a significant concern, suggests the CII-EY whitepaper titled, “Evolving global tax policy trends: Outlook for India”. The White paper explores some of the emerging trends in global taxation and delineates its implications on India’s tax policy. In this context, the paper brings out that internationally, tax avoidance has become an area of concern and several countries are becoming apprehensive about tax evasion and avoidance. It is in this context that the debate over base erosion and profit shifting (BEPS) has assumed special significance for both OECD and non-OECD countries.
Similarly, the issue of transfer pricing and GAAR are also aimed at preventing perceived avoidance and evasion of tax. Both transfer pricing and GAAR are increasingly becoming a source of conflict between MNCs and the revenue authorities leading to a disputes and litigation. This has led to the creation of alternative dispute settlement mechanisms such as advance pricing agreements, safe harbours, among others. The White Paper also covers indirect taxes and recommends an early implementation of GST in India.
The paper calls for comprehensive reforms in GAAR, transfer pricing and indirect taxation. The aim is to bring clarity on the various provisions of taxation which would address the concerns of industry and bring investor confidence back in the country.
The same was released at the 1st Global Tax Summit organized by CII on 20 November, 2013 at New Delhi.