India is considering waiving penalties on all past cross-border deals that would come under the scanner of tax authorities once parliament clears a proposal to retroactively tax such transactions, the Economic Times reported Thursday.
Citing an official familiar with the matter, the report said the penalty waiver may pare down Vodafone Group PLC's (VOD.LN) arrears to the government from a 2007 purchase of a telecommunication venture in India to INR79 billion from INR200 billion.
According to the report, Vodafone's total arrears include INR79 billion as tax and an equal amount as penalty for failure to deduct tax at source in 2007. The remaining is the interest on delayed payment of tax, it said.
The plan to waive penalties is part of the government's efforts to pacify foreign investors spooked by recent tax proposals, the report said.
Newspaper website: http://www.economictimes.com
-By Bangalore Bureau; Dow Jones Newswires; firstname.lastname@example.org