Infosys signs agreement with US IRS for lower tax rate

Global software major Infosys on Tuesday said it has signed an agreement with the US Internal Revenue Service (IRS) which will lead to an effective tax rate lower by about 100 basis points (bps) for future periods.

According to the Bengaluru-based firm, the advanced pricing agreement (APA) -- the premilinary discussions on which were initiated with the IRS in 2015 -- is expected to result in the reversal of tax provisions of around $225 million in the quarter ended December 31, 2017.

"As a result of the APA methodology, the company expects its overall effective tax rate to be lower by around 100 bps for future periods covered under the APA," the company said in a regulatory filing to the BSE.

The BSE filing said this agreement covers financial years from 2011 to 2021.

"Further, in line with the APA, the company expects to payout approximately $233 million due to the difference between the taxes payable for prior periods as per the APA and the actual taxes paid for such periods. This amount is expected to be paid over the next few quartes," the company added.

The company said the APA will enhance predictability of its tax obligations in respect of its US operations.

--IANS

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