The Financial Executives International, Financial Services Forum, Information Technology Industry Council, Investment Company Institute, Managed Funds Association, National Foreign Trade Council, Securities Industry and Financial Markets Association, Software Finance & Tax Executives Council, TechAmerica, U.S. Chamber of Commerce, United States Council for International Business, and the U.S.-India Business Council today submitted a letter to Secretary of the Treasury Timothy Geithner that outlines serious concerns with proposed tax provisions in India’s Union Budget Finance Bill 2012 and strongly encourages Secretary Geithner to address these concerns with representatives of the Indian government.
The Associations believe that if enacted, the proposals will have a significant negative effect on member companies operating in India, their customers and shareholders, and investment in India. Specifically, provisions such as an unprecedented period of retroactive tax collection, a broad and unclear general anti-abuse rule (GAAR) and an onerous tax on indirect stock transfers, are inconsistent with international tax policy and standards, and result in significant erosion of the rule of law.
In their letter, the Associations note that, “A predictable, transparent and internationally consistent tax regime is imperative for companies operating in India, and is a critical component of attracting long term investment. We believe that the implementation of these provisions will have immediate and severe consequences for companies, affecting the willingness of companies to commence or continue their operations in India.”
The Indian Union Budget 2012-2013, including the Finance Bill proposing the retroactive tax provisions, was released on March 16, 2012.
