India's new tax avoidance law

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IndiaIndia has postponed an implementation of a controversial anti-tax-avoidance law implementation for another 2 years. Originally the law was planned to be implemented on April 1st, 2014. According to the latest announcement it will come in force no earlier than April 1st, 2016. The proposed law targets businesses which use tax havens to reduce the tax burden in India. It is expected that a use of tax haven or often so-called offshore companies will be reduced and more careful tax planning through jurisdictions like Singapore, Cyprus, etc., which have double tax agreements signed with India, will take place. India is not alone to put tax pressure on tax haven jurisdictions like Delaware, BVI, Belize, Seychelles and others. International banks are becoming more conscious when it comes to opening bank accounts for companies in tax havens. Tax haven were very popular due to low cost of incorporation and compliance. Low tax jurisdictions like Singapore, Cyprus and Ireland are becoming more and more popular as businessmen are switching from aggressive tax planning by using tax havens to more prudent approach by using low tax jurisdictions.