The new direct taxes code will review provisions relating to taxation of foreign companies and residential status of foreign companies, including their control and management etc, finance minister Pranab Mukherjee said today.
Addressing the parliamentary consultative committee attached to his ministry, Mukherjee said the direct taxes code would also focus on a minimum alternate tax (MAT) on gross assets and a general anti-avoidance rule.
The direct taxes code is aimed at giving a competitive edge to the country while dealing with international taxation issues. The code will have a provision for advance pricing agreement (APA), which, he said, would bring certainty and stability in the taxation of cross border transactions.
The dispute resolution panel (DRP), already introduced with effect from 1 October 2009 for disputes relating to transfer pricing along with APA would provide a fiscal environment conducive for foreign investments in India, he said.
He said trade and industry has been demanding an alternate dispute resolution mechanism for transfer pricing related issues for quite some time. These new initiatives, already taken, will check avoidable litigations with resident as well as non-resident taxpayers, he added.
The government, he said, will take inputs from various stakeholders before giving final shape to the direct taxes code.