India scraps retrospective tax to appease foreign investor woes

The government backtracks on an aggressive tax law, with the hope of attracting foreign investment as state-owned companies undergo privatisation.

New Delhi’s bold move to scrap the controversial law that sees foreign companies taxed retrospectively is expected to restore international investor confidence in the market and improve the country’s investment climate. Additionally, it should settle ongoing multi-billion dollar tax disputes with telecom giant, Vodafone Plc and Britain's oil major, Cairn Energy.

On August 13, 2021, the Taxation Laws Amendment Act 2021 received presidential assent, rolling back the nearly decade-long contentious application of indirect transfer tax, which had been introduced in 2012.

Foreign investors looking to access the Indian market seek stability and certainty in the legal and tax framework when it comes to planning investments, Kshama Loya,...

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