New Delhi: Finance Ministry Thursday said the decision to exempt foreign companies which do not have a permanent establishment from payment of MAT will boost investor confidence.
"We have announced clarity on non-applicability of MAT on foreign companies other than FIIs not having PE today. We hope this will boost up investor confidence," Revenue Secretary Hasmukh Adhia tweeted.
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Earlier in the day, the government said that Income-Tax Act will be amended with retrospective effect to exempt overseas companies which do not have a permanent establishment in India from paying minimum alternate tax (MAT).
Foreign companies, irrespective of whether they belong to a country with which India has a Double Taxation Avoidance Agreement (DTAA), has been exempted from minimum alternate tax (MAT) on profits from April 2001 if they do not have a place of business in India, a Finance Ministry statement said.
The provisions of Section 115JB of Income Tax will not apply to foreign companies with effect from April 1, 2001, and an appropriate amendment to the I-T Act in this regard will be carried out, it added.
Earlier this month, the government had exempted foreign institutional and portfolio investors from payment of MAT on the capital gains made by them before April 1, 2015.
The Budget 2015-16 had already exempted FIIs/FPIs from paying the levy on gains made after April 1.
