In the present times, most corporations are looking at taking advantage of globalization and setting up entities across the world. Most countries want to attract foreign capital flows and offer attractive tax regimes to non-resident investors.
This has resulted in an increase in cross-border investments by multinationals. Typically, this creates two additional income streams for the investing entity: (i) ‘capital gains’ when the income stems from the sale of shares/ investments; and (ii) ‘dividends’ which is a periodical return on investment paid by the investee company. Lower tax incidence and ease of compliance enable a jurisdiction to attract investments. We have discussed below the Indian regime and how it stacks against a select few countries.
Please click here to read the full article by Kumarmanglam Vijay, published in Financial Express.
Kumarmanglam is an equity partner of the firm and also heads the direct tax and regulatory practice at JSA. He has more than 25 years of experience in matters relating to direct taxation (including international taxation, transfer pricing, litigation, anti-avoidance laws, and M&A tax), accounting, and corporate laws including mergers and acquisition, joint ventures, foreign investments, market entry strategy, and corporate restructuring.