INDIA 10TH MOST COMPLEX COUNTRY FOR ACCOUNTING, TAX COMPLIANCE

The report reads, “The country’s (India’s) current tax system is complex and multi-layered. Crossborder compliance, compounding of taxes on domestically produced goods and services, in addition to several Central and state taxes, exacerbate the complexity of the system. Key factors that increase complexity include the various statutes governing taxation and foreign investment— the Foreign Exchange Management Act (FEMA), the Income Tax Act (ITA), tax laws of 29 states and seven union territories. Furthermore, no one can ignore custom guidelines for any import and export of goods and services in India.”

As per the report, the TMF surveyors examined the varied complexities of financial accounting and tax compliance in 94 jurisdictions worldwide, with 50 countries in Europe and the Middle East, 24 in the Americas and 20 in Asia-Pacific.

The ranking was done on the basis of 70 detailed questions that were put across inhouse accounting experts and tax experts to rank the complexity of their local jurisdiction.

The surveyors focused on the accounting and tax rules and regulations in different jurisdictions, how to incorporate relevant regulations into the business and the risks associated with noncompliance.

According to Indian tax experts, the introduction of GST will increase the number of returns that a businessman will have to file from two to 49. A service provider, who until now has to file two service tax returns per year, will have to file three returns on the 10th, 15th and 20th of every month, that is 36 returns per year under the new system. This will be apart from the 12 tax deducted at source (TDS) returns and one annual return that the service provider will have to file.