Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Online Rummy Loss Cannot Be Taxed as Gross Winnings: Hyderabad ITAT Deletes ₹3.54 Crore Addition
The Hyderabad Income Tax Appellate Tribunal (ITAT) ruled that losses from online rummy cannot be disregarded when calculating taxable winnings. The tribunal deleted a ₹3.54 crore addition made by tax authorities who had taxed gross winnings without offsetting losses. The ruling clarifies that net winnings, not gross receipts, form the correct basis for taxation in skill-based online gaming. This decision has significant implications for how online gaming platforms and players report income under Indian personal income tax law, particularly amid evolving regulatory treatment of online gaming taxation in India.
No Form 10B? ITAT Delhi Clarifies: Charitable Trust Cannot Be Taxed on Gross Receipts Alone
The Delhi Income Tax Appellate Tribunal (ITAT) clarified that a charitable trust's failure to file Form 10B (audit report) does not automatically expose its entire gross receipts to taxation. The tribunal held that procedural non-compliance cannot override substantive entitlement to exemptions under Indian income tax law for registered charitable trusts. Tax authorities cannot treat gross receipts as taxable income solely due to a missing form. The ruling reinforces a taxpayer-friendly interpretation of compliance requirements, distinguishing procedural defaults from substantive eligibility for tax-exempt status under Indian law.
Make the IRS an Offer It Can’t Refuse
This article discusses the IRS Offer in Compromise (OIC) program, which allows eligible taxpayers to settle their federal tax debt for less than the full amount owed. It outlines qualifying criteria including doubt as to collectibility, doubt as to liability, and effective tax administration. The piece provides practical guidance on how taxpayers and practitioners can navigate the application process, calculate reasonable collection potential, and improve acceptance odds. It also covers common pitfalls that lead to rejection and strategic considerations for timing and structuring an offer to the IRS.
PEEC finalizes revisions to tax services independence guidance
The Professional Ethics Executive Committee (PEEC) of the AICPA has finalized revisions to its independence guidance concerning tax services. These updates clarify the boundaries and conditions under which accounting firms can provide tax services to audit clients without compromising auditor independence. The revisions address potential conflicts of interest when CPA firms simultaneously perform tax work and audit engagements for the same client. The guidance is significant for public accounting firms navigating dual-service relationships, ensuring compliance with independence standards while managing tax engagements, and reflects ongoing efforts to maintain audit integrity in the profession.
Dimapur Unit Tax Department Carries Out Field Inspection Drive for GST Compliance Awareness
The Dimapur Unit Tax Department conducted a field inspection drive aimed at raising GST compliance awareness among businesses in the region. Officers visited commercial establishments to educate taxpayers on GST obligations, registration requirements, and proper invoicing practices. The initiative reflects ongoing efforts by Indian tax authorities to improve voluntary compliance at the grassroots level, particularly in smaller urban centers. The drive also served as an enforcement exercise to identify non-compliant traders and ensure businesses are fulfilling their statutory GST duties, including timely filing of returns and proper maintenance of records.
Karnataka HC Clarifies No GST on Machinery Returned to Seller for Testing Without Consideration
The Karnataka High Court has ruled that no GST is applicable on machinery returned to a seller for testing purposes when no consideration is involved in the transaction. The court clarified that such a movement of goods does not constitute a taxable supply under GST law, as the essential element of consideration is absent. This ruling provides important guidance for businesses engaged in machinery testing and repair arrangements, confirming that temporary returns to suppliers for quality checks or testing without payment do not trigger GST liability, offering relief to manufacturers and industrial buyers.
N.Y. Times: Judge Denounces Trump’s I.R.S. Suit as Improper Exercise in Self-Dealing
A federal judge has sharply criticized a lawsuit filed by the Trump administration involving the IRS, characterizing it as an improper exercise in self-dealing. The case raises significant concerns about executive branch interference with the tax agency and potential conflicts of interest. The judge's denunciation highlights tensions between the administration and independent tax enforcement, drawing scrutiny over whether the suit was pursued for improper political or personal benefit rather than legitimate legal grounds, with broader implications for IRS independence and tax administration integrity.
Gujarat HC Rejects Plea Against Fake GST ITC Demand Over Misleading Submissions to the Court
The Gujarat High Court dismissed a petition challenging a GST demand related to fraudulent input tax credit (ITC) claims, citing misleading submissions made by the petitioner to the court. The HC found that the petitioner had misrepresented facts in their arguments, weakening their case against the tax authority's demand. The ruling reinforces judicial intolerance toward attempts to exploit procedural remedies through false or deceptive statements in fake ITC fraud cases. The decision underscores tax authorities' continued crackdown on bogus ITC claims, which remain a significant concern under India's GST framework.
Car Dealer Bonuses — VAT Exempt or Taxable? (Cassazione)
Italy's Supreme Court (Cassazione) has ruled on whether bonuses paid by manufacturers to car dealers fall within the scope of VAT or qualify for exemption. The case examines the VAT treatment of these payments, specifically whether they constitute consideration for a supply of services rendered by dealers or represent a discount/rebate reducing the taxable base. The ruling has significant implications for the automotive distribution sector in Italy, clarifying how manufacturer-to-dealer incentive payments should be characterised and taxed under Italian and EU VAT law.
GST Registration Suspensions Rise 25% Due to Non-Compliance
GST registration suspensions in India have surged by 25% due to increased non-compliance among registered taxpayers. Indian tax authorities have intensified enforcement actions, targeting businesses that fail to file returns, report discrepancies, or engage in fraudulent activities such as fake invoicing. The suspension mechanism allows authorities to temporarily deactivate GST registrations pending investigation or rectification, disrupting business operations for non-compliant entities. This rise reflects the government's broader crackdown on GST evasion and its use of data analytics to identify suspicious taxpayer behaviour. Businesses facing suspension must resolve compliance gaps and apply for revocation to restore their GST registration status.
Gifted a House? How Transferring Property (Cheaply) Can Also Transfer Tax Debt to Someone Else: A Comprehensive Guide to Section 160 of the Income Tax Act
A comprehensive guide to Section 160 of Canada's Income Tax Act, which allows the CRA to hold recipients of property transfers jointly liable for the transferor's tax debt. The article explains how gifting or selling property below fair market value — including to spouses, children, or relatives — can expose the recipient to the original owner's outstanding tax obligations. Key topics include the conditions triggering Section 160 liability, how the CRA assesses transferees, available defenses, and strategies to mitigate risk when transferring real estate or other assets at undervalue.
Greece Seizes Evidence In Suspected €46.9M VAT Fraud
Greek authorities have seized evidence in connection with a suspected VAT fraud scheme valued at approximately €46.9 million. The investigation targets individuals and entities alleged to have evaded VAT obligations, with authorities conducting raids to gather documentation and other evidence. The case highlights ongoing enforcement efforts by Greek tax authorities to combat large-scale VAT fraud, which remains a significant source of revenue loss across EU member states. Greece has intensified its tax compliance and enforcement activities in recent years as part of broader fiscal consolidation efforts and EU-level commitments to reduce the VAT gap.
TEAC criterion on the REDEF register (excise/VAT depots)
Spain's Central Economic-Administrative Court (TEAC) has issued a criterion regarding the REDEF register, which governs excise duty and VAT depot operations. The ruling clarifies administrative and compliance obligations for businesses operating fiscal warehouses and tax depots under Spain's excise and VAT frameworks. TEAC criteria carry binding precedential weight for Spanish tax authorities, making this decision significant for warehouse operators and businesses using duty-suspension arrangements. The ruling addresses registration requirements and procedural rules applicable to excise and VAT depot operators in Spain.
A 3-Part Blueprint For Sentencing Variance Arguments
This article discusses legal strategies for arguing sentencing variances in criminal cases, focusing on how defense attorneys can present arguments to courts for departures from standard sentencing guidelines. While published in a tax law section, the content appears to be a general criminal law/sentencing procedure piece without substantive tax-specific content.
Karnataka HC Grants Relief on Common GST Notices, GSTR-2A/GSTR-3B ITC
The Karnataka High Court has granted relief to taxpayers facing common GST notices related to discrepancies between GSTR-2A and GSTR-3B for Input Tax Credit (ITC) claims. The court's ruling addresses procedural and substantive issues around how tax authorities issue bulk or common notices to multiple taxpayers for ITC mismatches. This decision provides significant relief to businesses challenging the validity of such notices, reinforcing taxpayer rights and clarifying the evidentiary weight of auto-populated GSTR-2A data versus self-declared GSTR-3B filings in ITC dispute proceedings under India's GST framework.
AP HC: Single SCN and Composite GST Order Cannot Be Given for Multiple Tax Periods
The Andhra Pradesh High Court has ruled that a single Show Cause Notice (SCN) and a composite GST order cannot be issued covering multiple tax periods simultaneously. The court held that tax authorities must issue separate notices and orders for each distinct tax period, ensuring procedural fairness and allowing taxpayers adequate opportunity to respond to period-specific allegations. This ruling has significant implications for GST enforcement practices in India, curtailing the practice of bundling multiple periods into one proceeding and strengthening taxpayer due process rights under the GST adjudication framework.
Guidance: Cross-border arrangement reporting: service availability and issues
UK HMRC guidance on service availability and issues for the cross-border arrangement reporting service, which relates to the UK's mandatory disclosure rules (MDR) aligned with the OECD DAC6 framework. This service is used by intermediaries and taxpayers to report potentially aggressive or abusive cross-border tax arrangements. The guidance alerts users to technical outages or disruptions affecting the reporting portal, helping ensure timely compliance with mandatory disclosure obligations that target tax avoidance structures involving multiple jurisdictions.
Uganda Tax Appeals Tribunal Rejects URA’s Treatment of VAT/Income‑Tax Variances (Ericsson AB)
Uganda's Tax Appeals Tribunal ruled against the Uganda Revenue Authority (URA) in a case involving Ericsson AB, rejecting the URA's approach of using discrepancies between VAT returns and income tax returns as automatic evidence of additional taxable income or undeclared sales. The tribunal found that VAT and income tax regimes operate under different rules, and variances between the two do not inherently indicate tax evasion or underreporting. The decision is significant for multinational companies operating in Uganda, clarifying the evidentiary standards the URA must meet in such assessments.
CBDT Tightens Scrutiny of Unexplained Income Additions: Fresh Directions Issued on Sections 68 to 69D and Section 115BBE
India's Central Board of Direct Taxes (CBDT) has issued fresh directions tightening scrutiny of unexplained income under Sections 68 to 69D of the Income Tax Act, along with Section 115BBE. These provisions target unexplained cash credits, investments, expenditures, and other assets where taxpayers cannot satisfactorily explain the source of funds. The new directions aim to standardize assessment procedures, ensure consistent application of these sections, and strengthen enforcement against tax evasion through undisclosed income. Section 115BBE imposes a higher flat tax rate on such unexplained income, making compliance critical for taxpayers with unverified financial transactions.
Karnataka HC Quashes Tax Demand, Upholds Taxpayer’s Right to Be Heard on GST ITC Claim
The Karnataka High Court quashed a tax demand against a taxpayer, reinforcing the principle of natural justice in GST proceedings. The case centred on an Input Tax Credit (ITC) claim where the tax authority issued a demand without adequately hearing the taxpayer's case. The court ruled that taxpayers have a fundamental right to be heard before adverse orders are passed under GST law. This ruling sets an important precedent for procedural fairness in GST disputes across India, highlighting that tax authorities must follow due process and cannot deny ITC claims without providing taxpayers a proper opportunity to present their arguments.
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