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Loophole Games - A Treatise on Tax Avoidance Strategies (2nd Edition)

Loophole Games - A Treatise on Tax Avoidance Strategies (2nd Edition)

by Smarak Swain
Tax Avoidance Tax Loopholes
About Book:

First edition of Loophole Games was released in April 2019 with loft ambitions of informing business managers, professionals, forensic auditors, and journalists about the extent to which the malaise of tax avoidance has spread its tentacles in India and around the world. Many interesting and structural changes have happened in the world of taxation in this last one year, which prompted me to review the book and come out with an updated edition. The year 2019 saw a sizeable reduction in corporate tax rates in India. The new regime India brought in the year was quite ingenuous. The primary challenge that lawmakers face in designing a national budget is finding a balance between reducing tax rates and providing incentives to priority sectors. The Akhilesh Ranjan Committee on direct taxes had recommended reduction of corporate tax rate and removal of all tax incentives. But the plethora of deductions and exemptions available to various industries cannot be removed overnight. They can only be phased out in a staggering manner. To resolve this dilemma, lawmakers in India have brought a new regime with low tax rate and no incentive, but this new regime does not replace the old regime. The taxpayer has been given the power to choose between the new and the old regime, thus giving more power and discretion to taxpayers. This policy, in a way, pushes for bothcontinuity and change. In line with the recommendations of the Akhilesh Ranjan Committee, the dividend taxation regime has also been changed from dividend distribution tax system to the classical system of taxing dividend.

Tectonic changes are happening internationally. Many countries have introduced levies on sales of digital companies, variously called as equalisation levy and digital service tax. There is an international consensus that such stopgap approach cannot be a substitute for a principle-based solution to tax the digital economy, but no singular solution has still been implemented. Equalisation levy presents its own challenges in implementation, especially since imposition of the levy on non-resident e-commerce operators in India in April 2020. Multilateral Instruments (MLIs) between various countries will start becoming effective from April 2020. It is to be seen how the Principal Purpose Test (PPT) clause, antifragmentation rule, new definitions of Permanent Establishment (PE) will play out in preventing treaty abuse.

This updated edition critically analyses these recent developments, and the fault lines, if any, that rogue consultants seek to take advantage of.

Categories: International Taxation, Direct Taxes
Publisher: Wolters Kluwer
About Publisher:

Wolters Kluwer Tax & Accounting in India (www.cchifirm.co.in), provides publishing, software and services that deliver vital insights, intelligent tools and guidance of subject-matter experts as well as offer subscription-based products with high quality content in areas including direct and indirect taxation, international taxation, corporate law and several other related topics. Wolters Kluwer Tax & Accounting (a Wolters Kluwer business) is part of the Wolters Kluwer Group, a leading global information service provider for professionals. Wolters Kluwer Tax & Accounting publications cover a wide range of topics such as tax, accounting, law, financial planning, human resources and training.

Author: Smarak Swain
About Author:
Smarak Swain : Smarak Swain graduated in Electrical Engineering from Indian Institute of Technology, Kharagpur in 2006, and joined the Indian Revenue Service (IRS) in 2008. He has also done Masters in Taxation and Business Laws (MTBL) from NALSAR University, Hyderabad. He has also authored the critically acclaimed guide to BEPS, Tangible Guide to Intangibles: Identification, Valuation, Taxation and Transfer Pricing. Through his writings, he aims to bring about tax transparency in the way businesses operate and see a genuine increase in India’s tax paying behaviour. In the Income tax department, he has wide exposure in the fields of audit, assessment, investigation, transfer pricing, and international taxation. He is originally from Orissa and currently lives in Bangalore with his family. His articles have been published in The Mint, Economic Times, First Post, and Asia Times.

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Ratings and Reviews

Overall Rating
Review
Tax Avoidance Tax Loopholes
About Book:

First edition of Loophole Games was released in April 2019 with loft ambitions of informing business managers, professionals, forensic auditors, and journalists about the extent to which the malaise of tax avoidance has spread its tentacles in India and around the world. Many interesting and structural changes have happened in the world of taxation in this last one year, which prompted me to review the book and come out with an updated edition. The year 2019 saw a sizeable reduction in corporate tax rates in India. The new regime India brought in the year was quite ingenuous. The primary challenge that lawmakers face in designing a national budget is finding a balance between reducing tax rates and providing incentives to priority sectors. The Akhilesh Ranjan Committee on direct taxes had recommended reduction of corporate tax rate and removal of all tax incentives. But the plethora of deductions and exemptions available to various industries cannot be removed overnight. They can only be phased out in a staggering manner. To resolve this dilemma, lawmakers in India have brought a new regime with low tax rate and no incentive, but this new regime does not replace the old regime. The taxpayer has been given the power to choose between the new and the old regime, thus giving more power and discretion to taxpayers. This policy, in a way, pushes for bothcontinuity and change. In line with the recommendations of the Akhilesh Ranjan Committee, the dividend taxation regime has also been changed from dividend distribution tax system to the classical system of taxing dividend.

Tectonic changes are happening internationally. Many countries have introduced levies on sales of digital companies, variously called as equalisation levy and digital service tax. There is an international consensus that such stopgap approach cannot be a substitute for a principle-based solution to tax the digital economy, but no singular solution has still been implemented. Equalisation levy presents its own challenges in implementation, especially since imposition of the levy on non-resident e-commerce operators in India in April 2020. Multilateral Instruments (MLIs) between various countries will start becoming effective from April 2020. It is to be seen how the Principal Purpose Test (PPT) clause, antifragmentation rule, new definitions of Permanent Establishment (PE) will play out in preventing treaty abuse.

This updated edition critically analyses these recent developments, and the fault lines, if any, that rogue consultants seek to take advantage of.

Categories: International Taxation, Direct Taxes
Publisher: Wolters Kluwer
About Publisher:

Wolters Kluwer Tax & Accounting in India (www.cchifirm.co.in), provides publishing, software and services that deliver vital insights, intelligent tools and guidance of subject-matter experts as well as offer subscription-based products with high quality content in areas including direct and indirect taxation, international taxation, corporate law and several other related topics. Wolters Kluwer Tax & Accounting (a Wolters Kluwer business) is part of the Wolters Kluwer Group, a leading global information service provider for professionals. Wolters Kluwer Tax & Accounting publications cover a wide range of topics such as tax, accounting, law, financial planning, human resources and training.

Author: Smarak Swain
About Author:
Smarak Swain : Smarak Swain graduated in Electrical Engineering from Indian Institute of Technology, Kharagpur in 2006, and joined the Indian Revenue Service (IRS) in 2008. He has also done Masters in Taxation and Business Laws (MTBL) from NALSAR University, Hyderabad. He has also authored the critically acclaimed guide to BEPS, Tangible Guide to Intangibles: Identification, Valuation, Taxation and Transfer Pricing. Through his writings, he aims to bring about tax transparency in the way businesses operate and see a genuine increase in India’s tax paying behaviour. In the Income tax department, he has wide exposure in the fields of audit, assessment, investigation, transfer pricing, and international taxation. He is originally from Orissa and currently lives in Bangalore with his family. His articles have been published in The Mint, Economic Times, First Post, and Asia Times.

Similar Books

Ratings and Reviews

Overall Rating
Review
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