Suchergebnisse

Tax cooperation seems to be more difficult to achieve through multilateralism than any other economic issue, despite growing consensus about the detrimental effects of corporate tax competition for both market integration and economic inequalities. Repeated attempts to harmonize corporate taxation have gained momentum since the financial crisis, with important proposals made by the OECD and the European Union. Yet failure to implement or even reach agreement on these proposals shows the need for leadership of the G7 in order to address the concerns of those countries that stand to lose most from corporate tax harmonization.

Tax cooperation seems to be more difficult to achieve through multilateralism than any other economic issue, despite growing consensus about the detrimental effects of corporate tax competition for both market integration and economic inequalities. Repeated attempts to harmonize corporate taxation have gained momentum since the financial crisis, with important proposals made by the OECD and the European Union. Yet failure to implement or even reach agreement on these proposals shows the need for leadership of the G7 in order to address the concerns of those countries that stand to lose most from corporate tax harmonization.

On 20th December, 2019, the Central Government introduced the Taxation Laws (Amendment) Ordinance, 2019, which created a favourable taxing environment for the Companies. Through this Ordinance, section 115BAB, which covers all sorts of domestic companies, that is, any company formed and registered in India, was introduced in the Income Tax Act which offered a very low tax rate of 15% (17.5% including surcharge and cess) to the new manufacturing companies. This Ordinance also reduced the Tax rate for domestic companies to 22% (25.17% including surcharge and cess). Additionally under the new corporate assessment strategy, new organizations that set up assembling offices in India beginning in October and initiate creation before the finish of March, 2023 will be charged at a viable pace of 17%. This move did cause a rise in the value of the stock in India, but through this paper, we plan to delve deeper into how this new introduction affected the economy of India – ranging from the stock market to the value of rupees against dollar, the idea behind introducing this Ordinance, while also touching upon what is Corporate Tax and the Corporate Tax system that was present before the introduction of section 115BAB.

Proposals for reforming the federal corporate income tax are neverending and ever-multiplying. They range from those that merely tinker around the edges, such as most recent proposals attacking the various perceived abuses that masquerade under the moniker "corporate tax shelter," to various integration approaches that arguably would gut the enterprise of a corporate income tax altogether. Since everything and the kitchen sink is at least theoretically in play, it seems appropriate to add this modest proposal, which I call the "cashless corporate tax" (CCT). As described below, the CCT is a "tax" that would replace the current corporate income tax-defined as the income tax the government currently collects directly from corporations-with government share ownership. The basic idea is that the government's current rights to corporate cash flows, as set forth in the Code, are functionally a form of equity ownership. Accordingly, it should be possible to replace such rights with direct equity ownership interests in corporations. The primary challenge is to determine the quantity and quality of the equity ownership interests, which, if held by the fisc, would most closely resemble - in whatever ways the legislature or the author deems relevant - the current corporate income tax. It is my hope that the process of meeting that challenge will lead to some insights into the nature of the current corporate income tax.