Tax Domestic, Foreign Firms Equally, Say Experts

Tax experts are of the view that corporate tax rates for foreign and domestic companies should be brought to the same level.

Speaking to Business Standard, Arvind Virmani, adviser, Planning Commission, said there was no rationale behind having different tax rates for foreign and domestic companies.

At present, the corporate tax rate is 35 per cent for domestic companies and the corporate tax rate is 48 per cent for foreign companies.

The Planning Commission adviser said the difference did not contribute much to the government revenue as the rates were applicable only on branches of foreign companies operating in the country, whose number was very small.

Since an overwhelming number of foreign companies were operating through their subsidiaries in the country, he said, the higher tax rate was not applicable on them.

Virmani said the government