Industry body demands changes in India
November 03, 2008
Indian employers have called on the government to clarify transfer pricing rules and introduce an advance pricing agreement programme to encourage investment
The Federation of Indian Chambers of Commerce and Industry (FICCI) said that faced with massive outflow of foreign capital, the Indian government must act.
Since the beginning of this financial year, India's foreign reserves have gone down by more than $35 billion.
Indian tax laws are notoriously complex and the FICCI wants the practical difficulties faced by the international community in relation to Indian transfer pricing regulations to be ironed out. The group stressed in particular the need for advance pricing agreements (APAs) so that foreign taxpayers can invest confidently with the certainty of tax treatment that APAs provide.
India also needs to introduce safe harbour rules to provide relief to taxpayers from detailed transfer pricing obligations under the law, the chamber said.
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