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Provisions impacting cross border M&A
from Taxmann's Budget Marathon | International Taxation | Daksha Baxi – Founder | SRI Solutions
by Taxmann
Expanding applicability of Angel Tax to NRs
To achieve the objective of prevention, generation and circulation of unaccounted money through share premium, this section which was restricted to receipt of money from residents is now expanded to cover nonresidents.
This change becomes effective for the FY 2023-24 (AY 2024-25)
Receipt of premium from VCCs or VCFs continues to be outside the purview of this tax.
Also premium received from persons notified by central govt continue to be exempt as before.
There is no change in how the FMV is to be determined. Higher of Rule 11U & 11UA or based on the value of assets including intangibles such as goodwill, know-how, patents, copyrights, trademarks, licences, franchise or any other business or commercial rights of similar nature is to be adopted.
Question arises whether Customer database, Employees’ skills etc can be part of these assets since in practice many a times the high premium results from the value placed on these intangibles of such companies.
