LOOPHOLE GAMES- A TREATISE ON TAX AVOIDANCE STRATEGIES

This book was written originally to highlight the gaps in tax laws that are often exploited for aggressive tax planning as well as for tax avoidance. Many of the loopholes discussed in the first edition of this book have been plugged in successive budgets. Many other loopholes have been ‘contained’ by multilateral effort of many countries which have been equally affected by base erosion and profit shifting from their respective jurisdictions.

Corporate structuring has become even more challenging as new antiabuse provisions have been introduced in domestic and treaty laws. At the same time, new loopholes are arising due to pressure on countries to give tax incentives for promoting business. Differential tax rates, for different types of income, and for same type of income in different industries, are creating new avenues of avoidance.

Fourth edition of this book has dug out the new vulnerabilities that have arisen in a post-CoVID world, where countries are under pressure to provide tax concessions to business and at the same time mobilise resources to invest in healthcare. Since the personal income-tax rates in India are now more higher than corporate income-tax rates, the book has given special focus to discussing loopholes in taxation of High Networth Individuals (HNIs) and professionals, and why these loopholes are expensive for the exchequer.

This edition is being released in the midst of great upheaval in international tax rules. More than 130 countries have come together under the aegis of OECD/G20-sponsored Inclusive Framework to redraft international tax rules through a two-pillar approach. While Pillar 1 will affect only a handful of large Multinational Enterprises, Pillar 2 will have wide ranging impact on abusive tax planning structures. It seeks to impose a minimum Preface level of taxation on multinational groups that are eligible to file Countryby-Country reports.