Govt exempts foreign companies without PE from paying MAT
Updated: Sep 24, 2015 05:05:38pm
New Delhi, Sept 24 (KNN) In a big relief to foreign firms, government on Thursday exempted them from paying Minimum Alternate Tax (MAT) retrospectively from April 2001, provided they did not have a permanent establishment in India.
The Government has decided to amend Income-Tax Act 1961 with effect from April 1, 2001.
The provisions of Section 115JB shall not be applicable to a foreign company if the foreign company - is a resident of a country having DTAA with India and such foreign company does not have a permanent establishment within the definition of the term in the relevant DTAA.
Further, it shall not be applicable if the foreign company is a resident of a country which does not have a DTAA with India and such foreign company is not required to seek registration under Section 592 of the Companies Act 1956 or Section 380 of the Companies Act 2013.
The decision has been taken after due consideration of the various aspects of the matter, Ministry of Finance said in a statement.
An appropriate amendment to the Income-tax Act in this regard will be carried out.
Earlier, the issues relating to taxation of foreign companies, having no permanent establishment in India, have been under consideration of the Government. In this regard, the Government has already clarified the inapplicability of MAT provisions to FIIs/FPIs.
The Government has now considered the issue of applicability of MAT under Section 115JB of the Income-tax Act to foreign companies having no place of business/permanent establishment in India. (KNN Bureau)
The Government has decided to amend Income-Tax Act 1961 with effect from April 1, 2001.
The provisions of Section 115JB shall not be applicable to a foreign company if the foreign company - is a resident of a country having DTAA with India and such foreign company does not have a permanent establishment within the definition of the term in the relevant DTAA.
Further, it shall not be applicable if the foreign company is a resident of a country which does not have a DTAA with India and such foreign company is not required to seek registration under Section 592 of the Companies Act 1956 or Section 380 of the Companies Act 2013.
The decision has been taken after due consideration of the various aspects of the matter, Ministry of Finance said in a statement.
An appropriate amendment to the Income-tax Act in this regard will be carried out.
Earlier, the issues relating to taxation of foreign companies, having no permanent establishment in India, have been under consideration of the Government. In this regard, the Government has already clarified the inapplicability of MAT provisions to FIIs/FPIs.
The Government has now considered the issue of applicability of MAT under Section 115JB of the Income-tax Act to foreign companies having no place of business/permanent establishment in India. (KNN Bureau)
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