Foundation for International Taxation Conference, 2010: Day Three

Day three was dedicated to transfer pricing and the disputes involved in the process. The session saw light with an interesting discussion on the podium among Mr. Mukesh Bhutani, Partner BMR India, Mr. Jerome Libin, Partner, Sutherland Asbill & Brennan, US, Mr. Vijay Mathur, Advisor, PwC and Mr. RN Dash on the Transfer Pricing Dispute Resolution Mechanisms. The question that arose related to the debate between substance and form of the entities involved and which one should be looked into for the purposes of taxation. The panel concluded in unison that undertaking Transfer Pricing issues were fact based and consequently it was a long drawn process. The discussion left the questions of Advance Pricing Agreements and Safe Harbour Rules open.

The technical session on Transfer Pricing Disputes and their Prevention was chaired by Mr. Samir Gandhi, Partner, Deloitte, India. Ms. Caroline Silberztein, Head of Transfer Pricing Unit, OECD, Paris praised India for a number of good quality judgments in Transfer Pricing, led by the Maruti Suzuki case, rendered by the Delhi High Court.

Her presentation was followed by an impressive presentation on the Transfer Pricing issues and the outlook towards them by the courts by Mr. Al Meghji, Partner, Osler, Hoskin & Harcourt, Canada. He highlighted how the process of litigation was transparent, open to challenge while the process undertaken by the competent authority was often opaque. He had argued the case on behalf of the assessee in the recent case of GlaxoSmithKline Inc. v. The Queen, 2010 FCA 201.

The next presentation by Mr. Vispi T. Patel on the Indian Judicial Transfer Pricing Disputes provided an insight into the view of the courts in India on TP disputes. Marketing intangibles was a highly debatable question in his opinion and the Maruti Suzuki case found mention in his speech. He concluded with the note that the TP officers need not be mechanical in their approach and mere quantification analysis was not the relevant criteria, for the protection of the taxpayer.

The Indian Perspective on Advance Pricing Agreements and Safe Harbour Rules was provided by Ms. Anuradha Bhatia, Director of International Tax (Transfer Pricing), Mumbai. She gave her view on the introduction of the safe harbor rules and how the matter is being approached by the authorities. This analysis was consorted by the Ms. Caroline Silberztein.

The final question and answers session saw the presence of the CBDT chairman Mr. SSN Moorthy. The session turned out to be an anti-climax as it did not reveal anything new. Most questions were met with the response that the Government will look or was looking into the matter and would take a call on that basis. The panel, however, conceded that the process of the Dispute Resolution Panel (DRP) needed a relook and vowed to take necessary steps to correct the same.

The post Q&A session was a session to be recorded by UTV and was marked by the presence of Mr. T.P. Ostwal, Mr. SSN Moorthy, Chairman, CBDT, Mr. Ketan Dalal, Mr. Arvind Datar, Mr. Girish Dave, Mr. Nihar Jambusaria. They discussed the policy implications of the Vodafone Judgment, the Maruti Suzuki case and the Linklaters Judgment.

This concluded the 3 day conference and the vote of thanks was given by Prof. Roy Rohatgi, the conference director.

Foundation for International Taxation Conference, 2010: Day One

The Foundation for International Taxation organized a conference from December 2 – 4, 2010 at the ITC Maratha Hotel & Hyaat Regency Hotel, Mumbai. The chairpersons and speakers were nationally and internationally recognized lawyers, chartered accountants and professors.

The oft-discussed Direct Taxes Code (DTC) was the first topic of discussion. Mr. Rahul Garg, Partner PwC, India spoke on the issues involving Branch Profits Tax including on the attribution of profits to the branches of MNC’s in India.

However, what stood out the most in the session was Mr. Mukesh Bhutani’s presentation. He is the Managing Partner and Tax Practice Leader at BMR Legal, India and the author of ‘Transfer Pricing: An Indian Perspective’ published by LexisNexis. He spoke on Transfer Pricing Issues and their Resolution. The highlights of the presentation included issues involving marketing intangibles and he further questioned their non-inclusion in the DTC. He generally took us through Advance Pricing Agreements (APA’s) and General Anti-Avoidance Rules (GAAR’s) and also specifically argued for the inclusion of ‘expert witnesses’ in tax matters.

The session came to a close with Mr. S Mahalingam, Executive Director and CFO, Tata Consultancy Services sharing his experience from the corporate viewpoint, with the audience.

The Technical Session was on International Tax Structuring for Investing Abroad and chaired by Mr. Nishith Desai, Founder, Nishith Desai Associates. The session was marked by country experiences viz. Brazil, Chile, Coloumbia where lawyers analyzed and shared the taxation and corporate laws in their countries. Mr. Sudir Kapadia, Partner Ernst & Young, India was highly critical of the definition of the Place of Effective Management (PoEM) rules that were being included in the DTC. He also questioned the lack of clarification in the DTC on virtually enabled board meetings or e-Board Meetings (eBM). The high spot in his presentation was the test for a Controlled Foreign Corporation (CFC) and his comparison of the Indian Rules with the UK CFC Rules.

The sponsored sessions were a look into the low tax jurisdictions and with that the presentations for the day concluded.

International Taxation Conference, 2010

The Foundation for International Taxation organizing its annual International Taxation Conference from 2-4 December, 2010 in Mumbai, India.

This Conference is the sixteenth in the annual conferences orgainsed by the FIT. The speakers include the top authorities on International Taxation.

For those interested, more details available at the FIT website.