Foreign Companies Without Permanent Establishment: Freed From MAT Provisions

The Central Board of Direct Taxes (CBDT), Government of India, via press release dated September 24, 2015, assured the inapplicability of Minimum Alternate Tax (MAT) provisions to Foreign Companies with effect from 01.04.2001.

The Government recently issued a circular, accepting the recommendations of the Committee (A P Shah Committee) appointed by it, wherein it had clarified the inapplicability of MAT provisions on Foreign Financial Institutions (FIIs) and Foreign Portfolio Investors (FPIs).

On further recommendation of the Committee the government had been considering the applicability of MAT under section 115JB of the Income-tax Act to Foreign companies having no place of business/ permanent establishment in India.