Nestle among companies facing back taxes in IndiaBloombergSeveral multinationals doing business in India are on the hook for significant back taxes, interest and potential penalty payments after the Indian Supreme Court overturned a lower court’s interpretation of tax treaty implementation. The companies were covered by tax treaties between India and the Netherlands, France and Switzerland — all three Organisation for Economic Co-operation and Development members with a similar most favored nation clause in the treaties. Lower taxes paid or withheld based on the earlier interpretations might need to be topped up. “This will raise once again the issue of the lack of certainty for MNCs [multinational corporations] operating in India,” tax advocate Rohan Shah said. “Not notifying beneficial clauses or partly notifying or notifying after a length of time effectively amounts to a unilateral treaty override,” Kanabar said.
