Hence, there is a need to have a greater clarity in our approach in this regard. Controlled Foreign Companies under Direct Tax Code To incentivize the overseas investments, in the last Union Budget, Government had announced a 50 per cent reduction in the tax rate in respect of dividend inflows from JV/WOS.
Taxation in respect of overseas investments under the “Controlled Foreign Companies” (CFC) norm of the proposed Direct Tax Code (DTC) would have implications for Indian outward FDI. It may, however, take a few years before we come to any definitive conclusions on their implications after DTC is introduced.