India must balance tax-base protection with certainty for global investors: Top I-T official

New Delhi, Aug 19 (IANS) India’s international tax framework is at a critical juncture and the country needs to balance protection of its tax base with policy stability, predictability and certainty for global investors, Monica Bhatia, Principal Chief Commissioner of Income Tax (International Tax), said on Wednesday.

Addressing the 23rd International Tax Conference organised by ASSOCHAM here, Bhatia said the Supreme Court’s Tiger Global judgment, the new Income-tax Act, evolving dispute-resolution mechanisms and rapid advances in technology were reshaping the international tax landscape.

“Policy stability is foundational to investor confidence,” Bhatia said. She also highlighted measures taken by the government following the Tiger Global judgment to provide greater certainty to bona fide legacy investments.

Bhatia also emphasised India’s progress in advance pricing agreements (APAs) and said that the country has crossed the 1,000-agreement mark, including more than 220 bilateral agreements.

Looking ahead, the senior Income Tax official said artificial intelligence changing business models as well as tax administration, raising new questions around permanent establishment, profit attribution and the location of value creation.

She stressed that international cooperation and consensus-based global rule-making would become increasingly important as technology evolves faster than existing tax rules.

Rakesh Nangia, Chairman of ASSOCHAM’s Task Force on International Taxes, said international taxation had moved from a phase of rapid evolution to a period of fundamental transition, with the Tiger Global judgment, new tax legislation, global minimum tax developments and AI shaping the next phase.

Sandeep Chaufla, Chairman of ASSOCHAM’s National Council on Direct Taxes, said governments were seeking to protect their tax bases while taxpayers wanted certainty and predictability.

“Balance in terms of legislation and its implementation is the need of the hour,” he said, while highlighting the growing role of AI in tax administration.

Moreover, the event discussed the post-Tiger Global tax landscape, AI and international tax policy, BEPS 2.0, treaty evolution, the new Income-tax Act, APAs, safe harbours and cross-border dispute resolution.

–IANS

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