In the bizarre and esoteric world of taxation, something good – say a 14 percent corporate tax cut – can also be something bad. Just ask the string of companies which have reported multi-billion-dollar hits to their fourth-quarter and full-year 2017 results because of the accounting effects of the United States Tax Cuts and Jobs Act. AIG and GM, for example, reported one-off accounting charges totaling approximately USD14bn last week, taking both companies into the red.
Indeed, in this topsy-turvy world, something you’d think under normal circumstances would be undesirable, like a financial loss, actually becomes an asset. In this case, the ability to use past losses to offset future income, thus enabling the taxpayer to pay less tax. And, as if to underline the point that there’s rarely anything straightforward where taxation is concerned, the value of these deferred tax … Read More »
India’s 2018 Budget barely registered a blip of the excitement scale. But it is still worth mentioning for a number of reasons. Not least because Finance Minister Arun Jaitley has managed to upset pretty much everybody with some unpopular – some observers say misguided – measures. I thought it was in the politician’s DNA that, as a minimum, they at least attempt to please some of the people, some of time, so this could be considered something of a rate feat.
For a Government that has prioritized foreign investment and improving its “doing business” ratings, this is a strange Budget indeed. Investors have immediately seized upon the proposal to reintroduce a tax on long-term capital gains, which was replaced by a securities transactions tax back in 2004. However, the latter tax remains in place, increasing the prospect of cascading taxation for … Read More »