| | JUNE 20238IN FOCUSANGEL TAX INTRODUCED FOR NON-LISTED STARTUPSSPIC SIGNS MOU TO BUILD POWER PLANT IN KAZAKHSTAN Angel tax will apply to investment in unlisted Indian start-ups from countries such as Mauritius, Singapore, and the Netherlands.The government has issued a list of "specified jurisdictions" that includes 21 countries that will be exempt from the new tax, including the United States, the United Kingdom, Australia, and Germany.However, the majority of investment flows to India come from Singapore, Ireland, the Netherlands, and Mauritius, which are not represented on this list.Global investors enter India through investment vehicles based in Mauritius and Singapore to invest in the unlisted sector. Experts are divided on whether specific special purpose vehicles (SPVs) located in unspecified countries will be exempt from the tax. "Some investors, such as category 1 foreign portfolio investors, pension funds, and broad-based investment funds, have received limited relief." Even such investors may need to reconsider setting up SPVs for investment in India rather than investing directly in order to qualify for angel tax exemption. It is surprising that Singapore, the Netherlands, and Luxembourg were not included, given that a large number of investments are routed to India through these important financial centres," said Gouri Puri, partner at Shardul Amarchand Mangaldas & Co.According to industry estimates, Singapore, Mauritius, and the UAE account for more than half of all FDI in India; leaving them off the list would have a negative impact on the entire start-up industry.Last Friday, the Central Board of Direct Taxes (CBDT) had proposed to exempt a host of foreign investors including sovereign wealth funds, pension funds, banks, and insurers from angel tax. It had also put out additional valuation norms for those that come within its net. President Kassym-Jomart Tokayev of Kazakhstan, who was in China for the China-Central Asia Summit and on a state visit, and Chairman Qian Zhimin of State Power Investment Corporation (SPIC) participated in a Kazakh-Chinese investment roundtable in Xi'an, Shaanxi province.They signed a memorandum of understanding for the construction of a large-scale wind power and energy storage plant with a capacity of 1 GW in Kazakhstan after exchanging opinions on the implementation of renewable energy projects and cooperation on green hydrogen generation.The principal parameters of a 1000MW solar farm project in Issy-Kul, Kyrgyzstan, were agreed upon during a meeting between the President of Kyrgyzstan and representatives of the Chinese business community on the same day.A number of new energy projects have been created in the region by SPIC as a result of its active participation in the Belt and Road Initiative and close collaboration with businesses in Central Asia, including the Zhanatas Wind-Power Project in Kazakhstan and the 1000MW solar farm project in Issy-Kul.These initiatives support local power supply, encourage local energy restructuring, and reflect SPIC's advantages in the development of clean energy.To support local economic growth and the improvement of living conditions, SPIC will continue to increase its energy cooperation with Belt and Road nations. By doing so, it will assist these nations in achieving energy security, independence, and stability.
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