Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Breaking News: Supreme Court Upholds Gujarat High Court Verdict – No GST on Transfer of Long-Term Leasehold Rights of Industrial Plots
India's Supreme Court upheld a Gujarat High Court verdict ruling that the transfer of long-term leasehold rights over industrial plots is not subject to GST. The court determined that such transfers do not constitute a supply of goods or services under the GST framework, providing significant relief to businesses involved in industrial land transactions. The ruling clarifies the GST treatment of leasehold rights, which has been a contentious area, and sets a binding precedent affecting industrial plot transactions and similar long-term lease arrangements across India.
Malaysia Introduces e-Invoice Voluntary Disclosure Programme
Malaysia has introduced an e-Invoice Voluntary Disclosure Programme, offering taxpayers an opportunity to come forward and rectify non-compliance with the country's e-invoicing requirements. The programme reflects Malaysia's ongoing effort to enforce its mandatory e-invoicing rollout, which has been phased in since August 2024. By allowing voluntary disclosure, the Inland Revenue Board of Malaysia (LHDN) aims to encourage adoption and correct implementation of the e-invoice system while reducing penalties for those who proactively address gaps in compliance. This development is significant for businesses operating in Malaysia that are navigating the transition to mandatory e-invoicing.
Madras HC: Govt. Contractors Eligible for Additional GST Reimbursement Following VAT-to-GST Transition
The Madras High Court has ruled that government contractors are entitled to additional GST reimbursement to compensate for the increased tax burden arising from the transition from VAT to GST. The court found that contractors who entered into agreements under the VAT regime and faced higher effective tax rates under GST are eligible for reimbursement of the differential cost from the government. This ruling has significant implications for public sector contracts and infrastructure projects entered into before GST implementation in 2017, clarifying the state's obligation to indemnify contractors against transition-related tax cost increases.
ECJ Case: Company director’s right to challenge VAT liability
A European Court of Justice case addresses whether a company director has the right to challenge a VAT liability assessment. The ruling has significant implications for how VAT debts can be pursued against individuals in their capacity as directors, particularly regarding procedural rights and the ability to contest underlying tax assessments. This case is relevant for directors of companies facing VAT enforcement actions across EU member states, as it clarifies the extent of personal liability exposure and the legal remedies available to individuals when tax authorities seek to recover VAT debts through director liability provisions.
Delhi HC Restores GST Registration of Tempo Owner, Citing Impact of Cancellation on Livelihood
The Delhi High Court has ordered the restoration of GST registration for a tempo (commercial vehicle) owner whose registration had been cancelled by authorities. The court emphasized that cancellation of GST registration directly impacts the individual's livelihood and ability to conduct business, warranting judicial intervention. The ruling highlights the courts' consistent approach of weighing the disproportionate hardship caused by GST registration cancellations on small business operators and self-employed individuals. The decision reinforces that tax authorities must consider humanitarian and livelihood factors before cancelling registrations, particularly for sole proprietors and small traders dependent on their registration for income.
A Matter of Balance: IRS Appeals Processes, Staffing Create Growing Concerns for Practitioners, Taxpayers
Practitioners and taxpayers are raising growing concerns about IRS Appeals processes and staffing shortfalls that are creating significant delays and imbalances in dispute resolution. The article examines how reduced staffing within IRS Appeals is affecting case timelines, access to hearings, and overall fairness in the tax controversy process. Tax professionals report difficulties securing timely appeals conferences and adequate engagement from Appeals officers. The situation points to systemic challenges within IRS administration that may undermine taxpayer rights and due process protections, prompting calls for resource investment and structural reform within the Appeals division.
Arbitration Valid In Tax Privacy Suit, H&R Block Tells 9th Circ.
H&R Block is arguing before the Ninth Circuit that an arbitration clause is valid in a tax privacy lawsuit. The case centers on whether customers who allege H&R Block improperly shared their tax data with third parties must resolve their claims through arbitration rather than litigation. The outcome could have significant implications for how tax preparation firms handle data privacy disputes and whether class action litigation in tax-related privacy cases can be compelled to arbitration, affecting millions of taxpayers who use commercial tax preparation services.
IRS Lacks Expert Testimony In Easement Fight, Donor Says
A taxpayer involved in a conservation easement dispute is challenging the IRS in Tax Court, arguing that the government lacks qualified expert testimony to support its position. Conservation easement cases have been a major IRS enforcement priority, with the agency frequently contesting inflated deduction valuations. The absence of expert testimony could weaken the IRS's case significantly, potentially setting a precedent for how the agency must substantiate its valuation challenges in easement disputes and impacting a broader IRS campaign against syndicated conservation easement tax shelters.
Amgen To Pay $74M To End Investor Suit Over $10.7B Tax Bill
Amgen has agreed to pay $74 million to settle an investor lawsuit stemming from a $10.7 billion IRS tax bill dispute. The investor suit alleged that Amgen misled shareholders about its transfer pricing arrangements and the associated tax liabilities. The settlement resolves securities claims but does not address the underlying IRS transfer pricing dispute, which involves how Amgen allocated profits between its US operations and Puerto Rico subsidiary. The case highlights the compounding legal and financial risks pharmaceutical companies face when aggressive transfer pricing strategies attract major IRS scrutiny.
Gambling Loss Limitations Condemned at IRS Hearing
At an IRS public hearing, taxpayers and advocates strongly criticized proposed regulations that would limit the deductibility of gambling losses. The rules, which restrict how session-based losses can be offset against winnings, drew condemnation from affected individuals and industry representatives who argued the limitations are overly burdensome and inconsistent with longstanding tax treatment. Commenters contended the proposals would result in taxation on phantom income, disproportionately harming casual gamblers. The hearing reflects ongoing tension between IRS rulemaking and taxpayer fairness concerns under existing personal income tax provisions governing gambling activity.
FTO orders FBR to fix IRIS glitches blocking Rs2.3m tax credit
Pakistan's Federal Tax Ombudsman (FTO) has ordered the FBR to resolve technical glitches in its IRIS tax filing system that have been blocking taxpayers from claiming Rs2.3 million in legitimate tax credits. The system errors are preventing the proper processing of tax credit claims, causing financial harm to affected taxpayers. The ruling highlights ongoing issues with Pakistan's tax administration technology infrastructure and compels FBR to remediate specific software defects within its flagship tax portal, with direct implications for taxpayer compliance and relief.
PTBA raises legal concerns over fixed Tax Scheme for small shopkeepers
The Pakistan Tax Bar Association (PTBA) has raised legal objections to the government's Fixed Tax Scheme designed for small shopkeepers, questioning its constitutional and statutory validity. The PTBA's concerns center on the legal framework underpinning the scheme, including issues around equitable treatment and proper legislative authority. The association's challenge could have significant implications for the implementation of the simplified tax regime, which was introduced to bring small retailers into the tax net through a flat-rate mechanism rather than standard income tax assessment procedures.
Section 87A Rebate Litigation: Is the ITAT Appeal Fee Always ₹10,000? A Fresh Perspective
An analysis of whether the appeal fee before India's Income Tax Appellate Tribunal (ITAT) is always ₹10,000 in Section 87A rebate disputes. The article examines the fee structure under the Income Tax Act and argues that the applicable fee may vary depending on the assessed income or tax demand involved, offering a fresh perspective for practitioners handling rebate litigation. Section 87A provides a tax rebate for lower-income individuals, and disputes over its applicability have surged following recent tax authority positions. The piece has practical significance for taxpayers and advisors navigating ITAT proceedings on rebate claims.
Can CPC Apply the Supreme Court’s Checkmate Judgment Retrospectively? ITAT Says No
India's ITAT has ruled that the Centralised Processing Centre (CPC) cannot apply the Supreme Court's Checkmate Services judgment retrospectively to disallow employer contributions to provident funds. The Checkmate ruling held that delayed EPF/ESI deposits are not deductible, but the ITAT held that the CPC cannot invoke this judgment for assessment years predating the decision without proper adjudication. The ruling provides important relief for taxpayers whose returns were processed by the CPC with retrospective disallowances, clarifying limits on automated processing authorities and reinforcing procedural safeguards in tax assessments.
Calcutta HC Stays ₹3.91 Lakh GST Demand, Questions Jurisdiction in Section 74 Proceedings
The Calcutta High Court has stayed a ₹3.91 lakh GST demand notice, raising questions about jurisdictional authority in proceedings initiated under Section 74 of the GST Act. The court's intervention challenges whether the issuing authority had proper jurisdiction to initiate the demand, which relates to cases involving fraud, wilful misstatement, or suppression of facts. This ruling is significant for taxpayers facing similar jurisdictional disputes in GST enforcement actions, potentially limiting tax authorities' reach in Section 74 proceedings pending further judicial examination.
Rajasthan High Court: GST Not Applicable on University Affiliation Fees
The Rajasthan High Court has ruled that GST is not applicable on university affiliation fees charged by universities to affiliated colleges. The court determined that affiliation services provided by universities do not constitute a taxable supply under GST law, exempting these fees from indirect tax. This ruling has significant implications for the higher education sector across India, potentially relieving affiliated colleges from GST liability on affiliation charges and clarifying the tax treatment of regulatory or statutory functions performed by universities under education legislation.
FOI release: Number of live Corporate Criminal Offences investigations
A UK Freedom of Information release reveals the number of live Corporate Criminal Offences (CCO) investigations being conducted by HMRC. The CCO, introduced under the Criminal Finances Act 2017, holds corporations criminally liable for failing to prevent the facilitation of tax evasion by associated persons. The disclosed figures provide insight into HMRC's enforcement activity and appetite for prosecuting businesses under this legislation, which is relevant for tax controversy practitioners advising corporates on compliance frameworks and the risk of criminal liability for tax evasion facilitation.
Madras HC Orders GST Authorities to Adjust Tax Paid Under Wrong Head Instead of Seeking Fresh Payment
The Madras High Court has ruled that GST authorities must adjust tax payments made under the wrong head rather than demanding fresh payment from taxpayers. The court ordered authorities to correct the misallocation administratively, relieving taxpayers of the burden of paying GST again due to clerical or procedural errors in head classification. This ruling has significant practical implications for Indian GST compliance, establishing that tax departments cannot penalize taxpayers for administrative mispostings by demanding duplicate payments, and must instead facilitate internal adjustments between CGST, SGST, or IGST heads as appropriate.
The future of tax disputes – will a tax settlement change the relationship between the tax authorities and the taxpayer?
This analysis examines whether formalised tax settlement mechanisms could reshape the relationship between tax authorities and taxpayers in resolving disputes. It explores how structured settlement frameworks might offer faster resolution, reduced litigation costs, and greater certainty for both parties compared to traditional adversarial proceedings. The article considers whether such approaches improve compliance, trust, and efficiency, while raising questions about consistency and fairness in outcomes. Relevant to multinational and domestic taxpayers navigating increasingly complex audit environments and seeking alternatives to prolonged tax controversy proceedings.
Allahabad HC Seeks Centre, CBDT’s Response on Judge’s Plea Against Tax Exemption Denial Under New Tax Regime
The Allahabad High Court has sought responses from the Central Government and the Central Board of Direct Taxes (CBDT) following a petition filed by a judge challenging the denial of tax exemptions under India's new tax regime. The case raises questions about whether certain exemptions available under the old personal income tax regime should apply or be accessible under the new simplified tax structure. The court's decision to issue notice to CBDT signals judicial scrutiny of the new regime's exemption framework, potentially impacting how personal income tax exemptions are interpreted and administered going forward.
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