Recommendations on India-U.S. Bilateral Tax Relationship

The Investment Company Institute, SIFMA and several other Trade Associations have written to the Internal Revenue Service ("IRS") and the Central Board of Direct Taxes of India ("CBDT") about current issues regarding India's taxation of cross-border trade and investment and the India-U.S. bilateral tax relationship.Essentially, the trade associations stated that Indian tax authorities and Indian Revenue authorities’ rapidly evolving policy views on transfer pricing, permanent establishments and other issues, and the assertion of such views in current disputes, are "impeding the proper operation of the dispute resolution procedures established by the India-U.S. treaty," which is designed to promptly resolve issues between the tax laws of the two countries. This has resulted in an unprecedented dearth of agreements and resolutions of issues between the United States and Indian tax authorities despite frequent discussions between the parties. The Trade Associations urge both the IRS and CBDI to do everything possible to resolve substantive points of disagreement and procedural issues in the current impasse in order to provide investors with the needed certainty that their tax treatment and cross-border disputes will be promptly resolved on a principled basis.

View letters in full here (links externally to PDF).For questions, contact Mark Howe or Dan Mulcahy.