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Impact&nbspof amendments to the India-Mauritius tax treaty

Recently,&nbspthe Government of India and the Government of Mauritius signed a protocol for&nbspamending the Double Taxation Avoidance Agreement between the two nations (Mauritius tax treaty). A Press Release summarising the amendments to the tax&nbsptreaty was issued by the Central Board of Direct Taxes on 10 May 2016.

As per the&nbspPress Release the Mauritius tax treaty has been amended to provide source-based&nbsptaxation for capital gains.

As a fallout&nbspof the aforesaid amendment, the Double Taxation Avoidance Agreement executed&nbspbetween India and Singapore would also get impacted as the exclusive taxing&nbsprights granted to the resident state under the said convention are co-terminus&nbspwith the Mauritius tax treaty.

Girish&nbspVanvari, Head of Tax, KPMG in India along with our senior tax partners shall&nbspshare their perspective on the above amendments. 


KPMG in India’s Analysis of the recent foreign investment norms in the e-commerce sector

The Department of Industrial Policy&nbspand Promotion (DIPP), Government of India furnished guidelines on foreign&nbspinvestment in e-commerce vide a Press note No. 3 (2016 series) dated 29 March&nbsp2016. Key features of these guidelines which are expected to affect the&nbspe-commerce landscape are:

  • Providing explicit definitions of e-commerce, an e-commerce entity, inventory based model and marketplace model prevalent in e-commerce 
  • Defining the areas in which foreign investment is allowed 
  • Articulating the guidelines for marketplaces in which foreign investment can be brought in 

We at KPMG, frequently interact with regulators to seek&nbspclarifications on the changes brought out by the government. 

Saumil Shah, Partner&nbspand Head, Private Equity Tax and Amarjeet&nbspSingh, Partner, Tax shall be sharing their perspective on the above policy&nbspchange and also seek feedback from the attendees which shall be used to&nbspfacilitate the discussions with regulator in order to seek further&nbspclarifications.


Demystifying&nbspPOEM - the guiding principles of CBDT 

The Finance Act, 2015 amended the provisions of the Income-tax&nbspAct, 1961 to provide that a company will be treated as a tax resident in India,&nbspif it is an Indian company or its Place of Effective Management (POEM) is in&nbspIndia. POEM has been defined to mean a place where key management and&nbspcommercial decisions that are necessary for the conduct of the business of an&nbspentity as a whole are, in substance, made.

The Memorandum explaining the provisions of the Finance Bill, 2015&nbspstated that a set of guiding principles to be followed in the determination of&nbspPOEM would be issued for the benefit of taxpayers as well as the tax&nbspadministration. With a view to remove any ambiguity and provide objective&nbspcriteria for determination of POEM, the Central Board of Direct Taxes has now&nbspissued draft guiding principles for the determination of POEM of a company.&nbspMNCs would need to closely analyse these guidelines to determine whether any of&nbsptheir overseas entities could have POEM in India, thereby exposing them to the&nbspIndian tax net.

We, at KPMG in India, are glad to&nbsporganise a knowledge sharing webinar to discuss key aspects related to POEM and&nbspthe draft guidelines prescribed by the CBDT and the likely implications thereof&nbspon MNCs. The discussion will be led by senior tax professionals. This webinar&nbspis intended to provide a direction to enable you to prepare for the changes and&nbsptake proactive action, wherever required, to avoid overseas entities having&nbspPOEM in India.


If you are not able to hear the webinar through the link provided, please check with your IT team. Please click here to view the technical specifications for the webinar.

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