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Irish Funds Makes Representation on Indian Minimum Alternate Tax (MAT)

25 June 2015

Recent developments in relation to the potential retrospective application of the Indian Minimum Alternate Tax (MAT) to foreign investors in India has been a cause of uncertainty and concern for investment funds registered in India as Foreign Institutional Investors (“FIIs”) or Foreign Portfolio Investors (“FPIs”).


The Indian Budget 2015 exempted foreign funds on a going forward basis from MAT from 1 April 2015. However, this exemption opened up a question about retrospective tax liabilities prior to 1 April 2015, when it has always been previously understood that MAT did not apply to foreign funds. The Indian tax authorities subsequently issued assessments to a number of investment funds retrospectively applying Indian MAT.

There has been much international engagement with the Indian authorities on this matter and on 11 May the Indian Finance Ministry announced that a special Committee would be convened to consider the question of the application of MAT on foreign companies, chaired by A.P. Justice Shah (the “Shah Committee”). This development put a stay on the pursuit of actions undertaken to assess Indian MAT from foreign institutional investors.

Irish Funds has made a representation to the Shah Committee outlining the rationale as to why the MAT should not be applied to foreign investment funds and the impact that this would have. The submission asks the Shah Committee to recommend to the Indian Government to appropriately clarify in the MAT legislation, with retrospective effect, its intent not to apply MAT provisions to FIIs/FPIs investing in India.

Read the Irish Funds representation to the Shah Committee.

Irish Funds has also co-signed a letter with other international investment fund associations urging the Shah Committee to advise the Indian Finance Minister to announce that MAT does not apply retrospectively to FIIs/FPIs.

Read the international industry coalition letter to the Shah Committee.

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