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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth
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To: Lizzie Tudor who wrote (5946)3/10/2004 8:27:38 PM
From: Lizzie Tudor  Read Replies (1) of 173976
 
California going after offshorers for taxes....

Indian IT firms get US tax blues

MUMBAI: The California government's move to tax Infosys in the US has all Indian IT companies worried. California's tax code requires corporations to pay taxes on a worldwide basis. However, the code also has a provision which permits corporations to pay taxes only on the profits earned from operations within the state
of California.

Infosys had requested that the latter method should be applied in its case. However, this was rejected by the state's Franchisee Tax Board.

Infosys official say that there is no impact on its financials and the California government's demand for taxes is not applicable with retrospective affect. Infosys is currently in discussion with its tax attorneys on the decision of the Franchise Tax board and will take appropriate action, a company spokesperson added.

The company could appeal against the taxation board's decision, tax experts say Indian IT companies follow what in the industry jargon is referred to as the 'offshore-onsite' model for delivery of services. Under this model, 10-25% of the manpower of a typical software company is based in the US for delivery of services.
economictimes.indiatimes.com
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