India-USA Current Affairs - 2019
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Both India and the US will sign an agreement to facilitate the exchange of country-by-country (CbC) reports filed by the ultimate parent corporations based in either of the countries.
Base Erosion and Profit Shifting (BEPS) has been at the focus of OECD to address Tax evasion. Multinational companies were accused of gaming tax systems to maximise profits, while potentially depriving tax authorities of revenue.
To address this issue one of the measures adopted by OECD is Country-By-Country Reports. The Country-By-Country Reports requires multinational companies to provide information about:
- The name of each country where it operates.
- The names of all its subsidiaries and affiliates in these countries.
- The performance of each subsidiary and affiliate, without exception.
- The tax charge in its accounts of each subsidiary and affiliate in each country.
- Details of the cost and net book value of its fixed assets in each country.
- Details of its gross and net assets for each country.
Section 286 of the Income-tax Act, 1961 requires Indian subsidiaries of multinational companies to provide details of key financial statements from other jurisdictions where they operate. This provides the I-T Department with a better operational view of such companies, primarily with regards to revenue and income tax paid.
The proposed agreement will enable both India and the US to exchange CbC Reports filed by the ultimate parent entities of International Groups in the respective jurisdictions. As a result, Indian constituent entities of international groups headquartered in the USA, who have already filed CbC Reports in the USA, would not be required to do local filing of the CbC Reports of their international groups in India and vice versa.
The United States has cleared the sale of the state-of-the-art Guardian 22 unmanned Guardian drones to India. The deal to sell UAV drones to India is estimated to be worth $2 to $3 billion. Though the deal has been approved by the State Department, an official announcement regarding the deal is yet to be announced.
The transfer of the state-of-the-art UAV technology to India will be the first significant progress after India’s entry into the exclusive Missile Technology Control Regime (MTCR) and after the US has designated India as a major defence partner. India became the 35th full member of the Missile Technology Control Regime (MTCR) in June 2016.
The transfer of Guardian UAV technology is aimed at furthering mutual security interests to protect the Indian Ocean.
The deal would also pave the way for the transfer of other key technology sales from the US to India. The Guardian unmanned aircraft has been classified as Category 1 aircraft with cutting edge technologies.
Last year, the Indian Navy had requested for this intelligence, surveillance and reconnaissance (ISR) platform. The US has designated India as a “major defence partner” under the Obama Administration. The US considers India as a key player to counter the Chinese threat. However, the Guardian UAV proposal was kept in abeyance under Obama administration.
UAVs operate without a human pilot. UAVs are commonly used in both the military and police forces in situations where the risk of sending a human piloted aircraft is unacceptable, or the situation makes using a manned aircraft impractical.