All GLG News Analyses Filed Under: Tax Issues

Rolls Royce India

January 28, 2008

Analysis by: GLG Expert Contributor

Analysis of:India: The Rolls Royce Decision | www.maxkapital.com

The article looks how the changing interpretation of laws in India can impact the business of multinational enterprises.

Tax & Regulatory - India

January 23, 2008

Analysis by: GLG Expert Contributor

Analysis of:India Tax & Regulatory | www.maxkapital.com

The article covers tax and regulatory aspects of doing business in India.  It is specific to the offshore drilling industry, but provides information which may be of use to others. 

Nitish GroverPrincipal, OwnerNitish Grover and Associates

FIN 48 - Will a delay give relief ?

January 8, 2008

Analysis of:FASB proposes delay of FIN 48 for non public enterprises | www.fasb.org

FIN 48   has caused enough problems  ever since it  was  issued  some time back. The  requirement to disclose  the  more likely than not evaluation of  tax liabilities in the context  of  SFAS 109 caused major problems for companies. Last year  the  FASB  refused  to  extend  the  applicable  date  in  the  case  of  those  companies  which  have  listed  securities. The FASB is now  proposing  to  defer  the effective date  for  non-public entities. In this analysis  I  look  at  the  possible ramifications of  the  same.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

A Look at Certain Capital Gains Implications for American Companies in Indian M&A Deals

December 10, 2007

Analysis of:CBDT reopens 400 PE, M&A Deals | economictimes.indiatimes.com

A  number  of  companies  from America  and  other  countries  are  engaging in M&A deals in India.The  Indian  Government  and  tax  authorities  have  decided  to  look  at  the  detailed  tax  implications  of  all  such  deals. In  a  number  of  cases  large  tax  demands have  been  raised. This  trend  has  picked  up  after  the  Vodafone deal  involving companies  based  in HongKong, UK  and  India. In  this  analysis  I  look  at  the  capital  gains  tax  implications  of  such  deals.

International Tax in India - Rolls Royce Decision

December 10, 2007

Analysis by: GLG Expert Contributor

Analysis of:MNCs on alert on Rolls I-T ruling | www.business-standard.com

The Tribunal ruled that Rolls Royce Plc has a Permanent Establishment (PE) in India because of the existence of an Indian subsidiary which performed support services to Rolls Royce Plc.  The result is that India wishes to include 35% of Rolls Royce Plc's India sales as profit taxable in India.  This is a bad decision and one which worries me. India has grown strongly on the back of the services sector which provides services to global operations of several MNC's. India is also a rapidly growing consumer nation.  To now seek to levy taxes on goods & services supplied to India from outside India only because an affiliate of the foreign company exists in India is silly.  In this case if Rolls Royce Plc did not have an Indian Subsidiary, the question of India tax and permanent establishment would not have arisen.  Such decisions may cause Rolls Royce Plc to remove global support services in India, which is not good for the economy.

Is Vodafone India Tax Dispute Impacted by the Triniti Ruling

December 7, 2007

Analysis by: GLG Expert Contributor

Analysis of:India the Authority for Advance Ruling on Triniti Corp | aar.gov.in

In India the Authority for Advance Rulings (Authority) issues rulings on points of law and fact which play a role in determining the tax payers’ liability to tax with respect to a transaction or proposed transaction. The rulings are binding on the applicant and the income tax authorities. In a recent ruling (Triniti Corporation), the Authority ruled in a manner which would not be welcome by Vodafone.

Analyzing Deferred Taxes for Warning Signals and Red Flags

November 12, 2007

Analysis by: GLG Expert Contributor

Analysis of:12/31/06 10-K for General Motors (GM) | www.sec.gov

General Motors (GM) made headlines last week when the company announced a large $39 billion charge to establish a full valuation allowance for its deferred tax assets in the U.S., as well as Canada and Germany. Given the considerable attention by the media and multiple questions I’ve received regarding GM’s charge, I thought it would be timely to write about some key risks within the area of deferred taxes that are common across a broad base of companies.  Included in the "Analysis" section below is recommended steps on how to analyze deferred taxes for these specific risks.

Thomas KleinManaging MemberKleinCPA PLLC

Investors Punish GM Stock, in Part on Large Deferred Tax Adjustment.

November 7, 2007

Analysis of:GM Posts Huge Loss | online.wsj.com

Investors fled General Motors following the release of its Q3 results.  The reported loss for the quarter was $38.96 billion of which 99% of the loss ($38.6 billion) resulted from the write-down of deferred tax assets.  Have investors overreacted to the noncash charge or is the decline in market value justified?

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Certain Tax Implications for US Companies Doing Business in India - Transfer Pricing

November 1, 2007

Analysis of:Tax Relief for Firms Engaged in Trade with US | www.business-standard.com

The  plethora  of  Double Tax  Avoidance Treaties (DTAA) which  the  US  has  with  various countries  are  meant to  lubricate the wheels of  international commerce  for  US  Companies. The Indian government has now decided  to  extend the  benefits of  the  DTAA  which  India  has  with  the  US  to  Indian companies doing  business with  the  US. This  will  have  major  beneficial  implications  for  US  companies  doing  business  in  India which  I  examine  in  this  analysis.

IRS “Dragnet” Must Now Be Based On “Just The Facts"

October 29, 2007

Analysis by: GLG Expert Contributor

Analysis of:IRS Is Denied Work Papers Of Textron in Pivotal Case | online.wsj.com

In the pivotal Textron case[1]the court held that requested tax accrual workpapers are protected by the work product privilege and are therefore not discoverable by the IRS in their audits due their “non-factual” status. As a result, any IRS "dragnet" must be based on "just the facts" as the court succinctly stated: "The determination of any tax owed by Textron must be based on factual information, none of which is contained in the workpapers ..." Textron p. 33 [1]District Court for Rhode Island in United States v. Textron Inc. and Subsidiaries, D R.I. No. 06-198T, Aug. 29, 2007

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