Direct tax code panel calls for branch profit tax on foreign companies
A panel on direct tax legislation has recommended introducing a branch profit tax for foreign companies on the amount repatriated to their overseas partners. The task force suggested reducing the corporation tax rate for these companies to the level applicable to their domestic counterparts (25 per cent).
Branch profit tax will make up for the revenue gap, which the Centre may grapple with if it uniformly brings down the corporation tax rate for all companies, said a person in the know. Currently, the basic corporation tax rate is 40 per cent for foreign firms and 25 per cent for ...