India: No minimum alternative tax, foreign institutional or portfolio investors

No minimum alternative tax for FIIs or FPIs in India

India’s government today announced it has accepted recommendations from a committee to clarify that the minimum alternative tax (MAT) does not apply to foreign institutional investors (FIIs) or foreign portfolio investors (FPIs), and that an amendment will be made to the Income-tax Act to reflect this position.

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The tax law amendment, as proposed, would clarify that the MAT provisions are not applicable to FIIs or FPIs that do not have a place of business or permanent establishment in India.

In the meantime, per the committee’s suggestion, there are indications that the Indian tax authority may issue a circular to clarify that the MAT provisions do not apply to FIIs and FPIs.

 

Read a September 2015 report [PDF 78 KB] prepared by the KPMG member firm in India: Tax Alert

 

Read a follow-up September 2015 report [PDF 430 KB] prepared by the KPMG member firm in India: Government accepts the recommendation of the A. P. Shah Committee to clarify the inapplicability of MAT to FIIs/ FPIs 

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