Tax Structuring & Litigation

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A specialism that we take pride in is our understanding of cross-border tax issues. The role of a tax advisor has generally been undertaken by accounting firms, but each tax position taken needs to be validated under law. In our prior dealings, we have seen lack of tax-enabled advisory as a huge handicap in managing and executing high-stakes transactions. This is crucial as India’s tax authorities typically adopt aggressive positions in assessing international taxpayers. Legitimately structured transactions and arrangements are often scrutinized and recharacterized without sufficient legal basis or guiding principle, resulting in heavy tax demands, harsh penalties, and even prosecution. Our expertise over the entire lifecycle of tax issues has helped us provide effective legal recourse – both preventive and curative – against such actions.

 

A sound understanding of India’s constantly evolving tax landscape is therefore crucial in enabling and tax-proofing dealmaking. We routinely advise clients on their commercial arrangements and transactions from an Indian and international tax standpoint, review existing structures and provide guidance on mitigation of tax risks, provide strategic counsel on looming tax proceedings and actions, represent them in proceedings at all higher judicial levels including preparing and filing written submissions, and engage and co-ordinate with senior counsels (QCs) where required and undertake litigation management in high-stakes appellate litigation.

Our tax practice encompasses a variety or complex cross-border work including:

  • international tax advisory and transactional tax advice on issues such as income characterization, transfer pricing, withholding requirements, tax indemnities, treaty applicability, permanent establishment risks, and applicability of anti-avoidance rules;
  • international tax structuring of inbound and outbound transactions by devising tax optimal and legally compliant financing strategies for efficient repatriation of income and profits, identifying tax efficient intermediate jurisdictions, and addressing issues of substance, effective control, and dual residence; and
  • cross-border restructuring of global operations to achieve overall tax efficiency, by advising on mergers, demergers, rearrangements, redomiciliations, and other modes of capital restructuring having a nexus with India, and in particular, the Indian indirect transfer tax;

Our members also have substantial experience in advising and representing clients before the Authority for Advance Rulings (AAR), Tax Tribunals, High Courts, and the Supreme Court, across the full spectrum of cross-border tax disputes, with specific know-how of handling investment and infrastructure matters.

An indicative list of tax matters that our members have previously handled includes:

  • advising one of the world’s largest investment banks on the Indian and international anti-avoidance implications of restructuring its global equities derivatives business following Brexit.
  • advising an international investment management firm on the Indian tax implications arising from the merger of its Mauritian fund into its Luxembourg parent, and also represented it before the Bombay High Court in a tax dispute relating to carry forward of losses following its conversion from a Delaware business trust into a Delaware LLC.
  • representing one of Asia’s biggest real estate investment companies before the Income-tax Appellate Tribunal in a first-of-its-kind tax dispute on beneficial ownership of income from a hybrid debt instrument.
  • representing a large pension fund before the AAR on a question of extension of domestic tax benefits to US entities based on the non-discrimination provisions in the India-US tax treaty.
  • representing one of the world’s largest PE funds in proceedings before the AAR and the Delhi High Court on the Indian indirect transfer tax consequences arising from its USD 2.6 billion exit from India’s largest homegrown e-commerce operator.

Relevant Research

Denial of tax treaty benefits: Blueprinting defence strategies for PE funds - A tax litigation perspective
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Top 5 Tax Considerations When Structuring Debt Investments In India
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