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BEPS Pillar 2: Global Minimum Taxation in a Digital Economy
The passage discusses the importance of establishing an equitable and sustainable international tax system in the digital economy. It highlights the Base Erosion and Profit Shifting (BEPS) project initiated by the OECD, focusing on its two pillars. ‘Pillar One’ addresses profit relocation to market jurisdictions, while ‘Pillar Two’ introduces Global Anti-Base Erosion (GloBE) rules, including a global minimum tax of 15%. The G20 Summit under India’s Presidency in 2023 adopted the G20 New Delhi Leaders’ Declaration, emphasizing swift implementation of the Two-Pillar international tax package. Many jurisdictions are progressing in implementing GloBE Rules, and it’s estimated that by 2025, 90% of global MNEs will adhere to a 15% minimum effective tax rate. The implementation of Pillar Two Model Rules will impact organizations globally, requiring them to assess implications, ensure compliance, and minimize tax risk through proactive measures, including reviewing and simplifying entity structures.
Continue reading — MCA Consulting
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MCA Consulting: Navigating Acquisition Financing
Acquisition financing is essential for companies aiming to grow through domestic and cross-border deals. Various methods to secure funding play a crucial role in driving these acquisitions.
Recent Highlights:
June 2023: Tata Communications acquired US-based Kaleyra for $100M in an all-cash deal. (Outbound)
July 2023: Havas India acquired PivotRoots. (Inbound)
August 2023: Titan expanded its stake in CaratLane by 27.18% for ₹4,621 Cr ($556.01M). (Domestic)
Acquisition Types:
Inbound: Foreign entities purchasing Indian companies.
Outbound: Indian entities acquiring foreign companies.
Financial Considerations:
RBI regulations limit domestic equity acquisition financing by Indian banks.
Outbound acquisitions can leverage loans from various lenders under regulatory constraints.
GIFT City opens global financial market access for smaller domestic companies.
Key Factors for Success:
Adherence to RBI and FEMA regulations.
Strategic use of GIFT City for international finance.
Navigating regulatory changes to enhance acquisition financing dynamics.
Despite global economic uncertainties, Indian corporations are poised for growth in domestic acquisitions. Facilitating equity finance within regulatory frameworks is crucial for sustaining this momentum.
Learn more now
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Interim Budget Update: Withdrawal of Outstanding Tax Demands – MCA Consulting
The FY 2024-2025 interim budget introduced a significant relief measure for small taxpayers, with no proposed amendments to the Income-tax law. The government announced the withdrawal of outstanding tax demands of Rs. 25,000/- per year up to FY 2009-10 and Rs. 10,000/- per year for FY 2010-11 to 2014-15. This measure affects a substantial number of disputed tax demands, including income tax, wealth tax, and gift tax, totaling Rs. 35 lakh crores. The Central Board of Direct Taxes (CBDT) clarified that demands under these amounts will be withdrawn, with a cap of Rs. 1,00,000/- per taxpayer, excluding TDS and TCS demands. This move aims to reduce the burden on taxpayers, alleviate the backlog of disputes, and enhance the business environment in India by resolving long-standing tax issues and facilitating withheld tax refunds.
Continue reading - https://mcaconsulting.com/blogs/withdrawal-of-outstanding-tax-demands-key-update-from-interim-budget/
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Navigating Uncertainty with Scenario Planning for Sustainable Growth
In today's VUCA world (Volatile, Uncertain, Complex, Ambiguous), traditional forecasting methods fall short. The COVID-19 pandemic and rapid technological advances have shown us the need for a strategic tool to navigate such unpredictability.
Scenario Planning is that tool. By exploring multiple plausible futures, businesses can make better-informed decisions and stay agile in the face of change. From geopolitical unrest to regulatory changes like the Carbon Border Adjustment Mechanism (CBAM), scenario planning helps organizations prepare for diverse outcomes.
Key Steps in Scenario Planning:
Identify External Parameters & Trends
Determine Critical Uncertainties
Develop Multiple Scenarios
Analyze Each Scenario
Craft Adaptive Strategies
Continuously Monitor & Adjust
Embrace Scenario Planning to proactively prepare, seize opportunities, and ensure sustainable growth. Remember, “Failing to plan is planning to fail.” Secure your organization's future today!
Explore more - MCA Consulting
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Tax Implications of Carbon Credit Generation in India: MCA Consulting Insights
Amidst escalating environmental concerns, organizations globally are embracing sustainable practices, including the trading of carbon credits, or Certified Emission Reductions (CERs). However, in India, this noble pursuit is intertwined with complex tax implications.
Understanding Carbon Credits
Carbon credits, born from the Kyoto Protocol of 1997, serve as tradable permits for greenhouse gas emission reduction. Generated through initiatives like the Clean Development Mechanism (CDM), they allow entities to offset emissions by investing in eco-friendly projects elsewhere.
Tax Conundrum
Tax treatment of carbon credits under India's Income Tax Act, 1961, was historically ambiguous. Revenue authorities perceived them as taxable business income, while taxpayers argued for their exemption as capital receipts. In response, Section 115BBG was introduced in 2017, prescribing a 10% flat tax rate on carbon credit income.
Challenges and Controversies
Despite legislative efforts, disputes persist. The failure of Section 115BBG to categorize carbon credit income as revenue or capital leaves room for interpretation, fueling legal debates. Recent tribunal rulings highlight the complexity, emphasizing the need for precise legal frameworks.
The Road Ahead
As cases await adjudication in higher courts, the future of carbon credit taxation in India remains uncertain. The outcome will not only influence tax policies but also shape environmental initiatives and investment decisions. Striking a balance between incentivizing green practices and fiscal prudence is crucial.
MCA Consulting Insights
MCA Consulting offers valuable insights into navigating the complexities of carbon credit taxation in India. Their expertise in tax matters ensures comprehensive understanding and strategic planning for organizations engaging in carbon credit transactions.
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Moving abroad? Figure out what it means for your Indian business - Mca Consulting
Overseas relocation among Indians is on the rise, driven by business expansion, wealth diversification, and familial reasons. When relocating, considerations for maintaining Indian business interests include compliance with regulations, tax implications, and appointing resident nominees. Understanding changes in residential status is crucial for tax obligations both in India and abroad. Businesses with operations in multiple countries need to ensure they aren't deemed controlled from India to avoid taxation. Compliance with Indian laws, including reporting under FEMA and transfer pricing requirements, remains essential. Tax treaties can offer beneficial rates for dividends and other income from Indian businesses, often with provisions for tax credits to mitigate double taxation. Seeking expert guidance can facilitate a smooth transition and continued management of Indian business interests from overseas.
Learn more in detail - https://mcaconsulting.com/blogs/relocating-overseas-find-out-how-it-impacts-your-indian-business/
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How Can Corporates And Start-ups Deal With Moonlighting Employees - Mca Consulting
The landscape of employment is evolving rapidly, and with it comes a phenomenon that is raising eyebrows in corporate corridors: moonlighting. In the Indian IT sector, the surge in employees juggling multiple assignments has sparked debates about its ethical and operational ramifications. While some view it as an unethical practice tantamount to cheating, others see it as an inevitable consequence of the changing dynamics of work, especially in the wake of the COVID-19 pandemic.
Understanding Moonlighting
Moonlighting, simply put, refers to employees taking up secondary jobs alongside their primary employment, often without their employer's knowledge. It's a trend fueled by factors such as the gig economy's rise and the newfound flexibility brought about by remote work. However, the crux lies in the fact that moonlighting blurs the lines between loyalty to one's employer and the pursuit of additional income streams.
Industry Response
The response from the industry has been mixed, with some companies taking a hardline stance by terminating employees engaged in moonlighting. Others, however, see it as an opportunity for adaptation and have opted for a more nuanced approach. They emphasize the importance of transparency, confidentiality, and performance parameters, asserting that as long as these criteria are met, how employees spend their time beyond working hours should not be a concern.
The Positives
In more progressive economies like the United States, moonlighting seamlessly integrates with the startup ecosystem. Entrepreneurs often seek out moonlighters who bring valuable skills at an affordable cost, fostering a mutually beneficial relationship. This symbiosis highlights the potential benefits of moonlighting, not just for individuals seeking additional income but also for burgeoning startups in need of specialized talent.
Learn more about Embracing Moonlighting: A New Era in Work Culture
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Withdrawal of outstanding tax demands – Key update from Interim Budget - Mca Consulting
One of the most eagerly awaited aspect in the budget for every citizen is the announcement of tax proposals. However, this anticipation in the FY 2024-2025 interim budget took us by surprise when Hon’ble Finance Minister Nirmala Sitharaman revealed no proposed amendments in the Income-tax law. Nonetheless, there was a small hope with unveiling of relief measures for all categories of small taxpayers, indicating that outstanding tax demands of Rs. 25,000/- per year up to FY 2009-10 and Rs. 10,000/- per year for FY 2010-11 to 2014-15 would be withdrawn.
A staggering 2.68 crore disputed tax demands, including Income Tax, wealth tax, and gift tax, totalling Rs. 35 lakh crores, are pending across various legal forums as confirmed by Shri. Sanjay Malhotra, Revenue Secretary at the Department of Revenue, Ministry of Finance. Among these, 2.1 crores have demands up to Rs. 25,000/-, with cases dating back to 1962. Furthermore, approximately 58 lakh demands qualify for relief up to FY 2009-10, and 53 lakh demands are eligible for the period spanning FY 2010-11 to 2014-15. The image below depicts the rising trend of the direct tax collection under dispute.
Continue reading - https://mcaconsulting.com/blogs/withdrawal-of-outstanding-tax-demands-key-update-from-interim-budget/
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Simplified GAAR: Tax Tactics for Changing Business Environments
In this rapidly changing business landscape, corporates frequently undergo substantial restructuring and reorganisation to stay agile and responsive to evolving circumstances. These structures often originate as a result of various external factors, such as macro-economic conditions or growth objectives.
While tax structuring has become a crucial approach for corporates to strengthen their business objectives, which may also culminate in optimising their taxes; it is important to recognise the emergence of a regulatory tool aimed at addressing tax avoidance – the General Anti-Avoidance Rule (GAAR).
The GAAR is a legislative provision that essentially aims to counteract tax avoidance arrangements that exploit loopholes, contravene the spirit of the law, or artificially reduce tax liabilities. Its purpose is to ensure that taxpayers do not undermine the fundamental principles of tax legislation through aggressive tax planning strategies. Distinguishing between tax avoidance and tax
planning is a critical consideration. Tax planning involves legitimate optimising of taxes using fiscal incentives, while tax avoidance means dodging to pay taxes without contravening the tax laws. Since virtually all business decisions have tax implications in today’s world, it follows that GAAR will radically affect the decision-making process across levels in organizations.
Continue reading - https://mcaconsulting.com/blogs/tax-strategies-admist-gaar/
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Scenario planning’s multi-stage process briefly outlined using the example of CBAM
⦁ Framing and Identifying External Parameters and Trends/ Key Drivers of Change:
In the case of CBAM, this involves considering global shifts and adoption rates, regulatory changes, technological advancements, and environmental and societal shifts.
⦁ Identifying Critical Uncertainties (Impact / Uncertainty Analysis):
Understanding variables that could significantly affect the outcome, such as which regions might adopt similar policies, how regulations may evolve, technological breakthroughs that reduce carbon footprints, and climate-related triggers.
⦁ Developing Multiple Scenarios:
Creating a range of plausible future scenarios based on critical uncertainties.
⦁ Analysing the Scenarios:
Evaluating each scenario’s potential impact on the organization.
⦁ Developing Strategies
Crafting strategies to thrive in each scenario or mitigate potential risks.
⦁ Continuous Monitoring:
Scenario planning is not a one-and-done exercise; it requires ongoing monitoring and adjustment as circumstances evolve.
Continue reading about Embracing Scenario Planning for Sustainable Growth
#corporate finance#charted accountant consultant#taxation#tax startegy#Financial advisory#financial advisory services
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Expert Financial Advisory Services by MCA Consulting
Corporate Finance Services: Our Core Offerings
Capital Budgeting Services
Be it assessment of cost vs risks, performing the role of a fund liaison, conducting feasibility analysis or preparing detailed project reports, our experienced team with expertise in both finance and regulatory aspects, helps our clients make informed financial decisions prior to massive capital outlays.
Capital Structuring Services
At MCA Consulting we delve deep into analysing the financial position of our clients, understand their need for capital, explore the best available options and suggest most appropriate solutions that propel the company towards its long-term growth strategy, thereby also prioritising the ownership pattern, cost of capital, fixed interest cost commitments and debt/equity leverage among other aspects.
Financial Management Services
It is the most fundamental aspect determining the success of any business. MCA Consulting works closely with all its clientele to enhance their working capital management, improve financial efficiency, and enhance cost optimisation and profitability.
Our team consisting of experts from management, finance and regulatory backgrounds play a hands-on role in all aspects of financial management, be it planning, operations process improvement, cost analysis and reduction, contract negotiations, optimising financing costs, tax efficient structures or improvement in profitability.
Virtual CFO Services in Bangalore, India
Our Virtual CFO Services in Bangalore has gained immense traction among clientele, both national and international, due to its significant value addition. MCA Consulting brings on board its complete organisational expertise, especially in finance and regulatory aspects, making our VCFO service a perfect fit for most companies, especially funded start-ups and SMEs that are looking for expert CFO services to cater to all their finance, compliance and reporting needs.
Global Business Services
Finance and business outsourcing continue to gain momentum as more and more global corporations are looking at accessing expertise in finance process improvement and reengineering their businesses. At MCA Consulting, we have been guiding our clients in evaluating the cost benefits of optimisation of finance operations, suggesting suitable solutions and guiding and assisting in setting up offshore back offices.
Continue reading - https://mcaconsulting.com/services/corporate-finance-services/
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MCA Consulting Core Offerings under Corporate Governance
Governance Framework
Governance is a work in progress. At MCA Consulting, we work closely with our clients in installing reliable methods of operationalising governance by helping setting up the board and its functioning along with establishing internal controls. We lay strict emphasis on integrating controls with regulations along with leadership and the ‘people’ aspect of governance. We take a holistic and long-term view of various aspects of governance, especially taking into consideration the organisation’s growth parameters. We help clients, mainly the management and the board, with issues related to change management, to conduct operational efficiency audits and risk assessment studies, and all aspects related to fulfilling their governance roles.
Enterprise Risk Assessment and Mitigation
We work with clients to build their corporate reputation by establishing strong governance models and regulatory compliance. We help prevent surprising defaults and avoid punitive provisions of the law by conducting frequent financial forensic investigation and establishing review mechanisms to eliminate weak systems and procedures.
Explore in detail — https://mcaconsulting.co.in/services/corporate-governance/
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MCA Consulting: Shaping Futures, Driving Success
MCA Consulting, established in 2011 in Bengaluru, India, stands as one of the country's rapidly growing consultancies. Founded by distinguished chartered accountants T N Manoharan, a Padma Shri awardee recognized for upholding governance standards, and Sachin Kumar Bangre, an alumnus of the prestigious Indian Institute of Management Bangalore (IIMB) and Chief Strategic Partner of Manohar Chowdhry & Associates, one of India's leading Chartered Accountancy firms.
The consultancy was conceived with a visionary goal: to establish a management consulting firm that thrives on collaboration, innovation, and communication. The founders placed a significant emphasis on leveraging human ingenuity to address the most challenging issues faced by their clients.
For over 11 years, MCA Consulting has been dedicated to supporting both Indian and offshore clients in their pursuit of growth. As the consultancy approaches more than a decade of operation, it is on the brink of further expansion. This strategic move aligns with India's anticipated exponential growth, positioning the country as a key player in the global economy. MCA Consulting's commitment to fostering collaboration and innovation positions it as a dynamic and integral player in the business consulting landscape, ready to contribute to the evolving business landscape in India and beyond.
Continue exploring - https://mcaconsulting.co.in/about-us/
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Understanding GAAR: Navigating Tax Strategies in a Changing Business Landscape
In this rapidly changing business landscape, corporates frequently undergo substantial restructuring and reorganisation to stay agile and responsive to evolving circumstances. These structures often originate as a result of various external factors, such as macro-economic conditions or growth objectives.
While tax structuring has become a crucial approach for corporates to strengthen their business objectives, which may also culminate in optimising their taxes; it is important to recognise the emergence of a regulatory tool aimed at addressing tax avoidance — the General Anti-Avoidance Rule (GAAR).
While tax structuring has become a crucial approach for corporates to strengthen their business objectives, which may also culminate in optimising their taxes; it is important to recognise the emergence of a regulatory tool aimed at addressing tax avoidance — the General Anti-Avoidance Rule (GAAR).
The GAAR is a legislative provision that essentially aims to counteract tax avoidance arrangements that exploit loopholes, contravene the spirit of the law, or artificially reduce tax liabilities. Its purpose is to ensure that taxpayers are not able to undermine the fundamental principles of tax legislation through aggressive tax planning strategies. Distinguishing between tax avoidance and tax
planning is a critical consideration. Tax planning involves legitimate optimising of taxes using fiscal incentives, while tax avoidance means dodging to pay taxes without contravening the tax laws. Since virtually all business decisions have tax implications in today’s world, it follows that GAAR will radically affect the decision-making process across levels in organizations.
Continue reading — https://mcaconsulting.co.in/blogs/tax-strategies-admist-gaar/
0 notes
Text
BEPS Pillar 2: Global Minimum Taxation in a Digital Economy
The passage discusses the importance of establishing an equitable and sustainable international tax system in the digital economy. It highlights the Base Erosion and Profit Shifting (BEPS) project initiated by the OECD, focusing on its two pillars. ‘Pillar One’ addresses profit relocation to market jurisdictions, while ‘Pillar Two’ introduces Global Anti-Base Erosion (GloBE) rules, including a global minimum tax of 15%. The G20 Summit under India’s Presidency in 2023 adopted the G20 New Delhi Leaders’ Declaration, emphasizing swift implementation of the Two-Pillar international tax package. Many jurisdictions are progressing in implementing GloBE Rules, and it’s estimated that by 2025, 90% of global MNEs will adhere to a 15% minimum effective tax rate. The implementation of Pillar Two Model Rules will impact organizations globally, requiring them to assess implications, ensure compliance, and minimize tax risk through proactive measures, including reviewing and simplifying entity structures.
Continue reading — https://mcaconsulting.co.in/blogs/beps-pillar-2-ensuring-a-minimum-taxation-standard-in-a-digitalized-global-economy/
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Employee Tax Deduction Claims: Employer Responsibilities and Legal Implications.
The blog discusses recent notices from the income tax department to employers in southern states of India, advising them about high refunds claimed by employees in comparison to TDS deducted. Employees often claim deductions like HRA, LTA, PF/PPF payments, etc., and may submit inflated or false bills. The tax department has urged employers to advise employees to file revised tax returns if needed. The blog highlights legal provisions, employer concerns, and the importance of accurate tax computation and deduction. Employers are cautioned about potential consequences and the need to educate employees on tax provisions. The onus is on employers to collect and verify evidence for employee claims and ensure accurate TDS deduction.
Know in detail — https://mcaconsulting.co.in/blogs/employee-tax-deduction-claims/
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What are the direct tax implications of generating carbon credits in India? — Mca Consulting
The blog discusses the importance of environmental protection and how organizations contribute through initiatives such as carbon credits. Carbon credits, traded internationally, represent emission reduction units and are a result of projects under the Clean Development Mechanism (CDM). The article delves into the taxability of carbon credits in India, highlighting the introduction of section 115BBG by the Finance Act, 2017. This specific provision imposes a 10% tax on income from the transfer of carbon credits and disallows deductions for expenditures. The article notes potential challenges to the taxability under this section and cites recent judicial decisions on the matter. It concludes by mentioning a pending Supreme Court case that could significantly impact the taxation of carbon credits in India.
Explore in detail- https://mcaconsulting.co.in/blogs/what-are-the-direct-tax-implications-of-generating-carbon-credits-in-india/
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