Retail in Asia

In Markets

Should India follow China’s stance on indirect acquisitions used for tax purposes?

Tax experts are wondering whether Indian authorities might not take a leaf out of China’s books with respect to indirect acquisitions of domestic companies through offshore transactions an Indian parallel would be the Hutch-Vodafone deal. China issued a circular last December saying these deals may be re-characterised if there is no "reasonable commercial purpose" for the indirect transfer of a Chinese company through an overseas holding company other than that of tax planning; and also that the existence of the intermediate offshore company used for the transfer may not even be recognised.