Tax effect of AS 27 on JCE

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Dear Sir / Mam,

As per Accounting Standard 27, There are three ways in which an agreement can be entered for a joint  venture i,e  JCO, JCA & JCE.

One can form a seprate entity with the option JCE, but forming a seprate entity like company, firm will lead to double taxation, one to the entity & other to the venturer(i,e share of income from jointventure).

I just want to confirm that is there any relief for the above matter. if not why one will enter Joint Venture with JCE.

Replies (1)

I am not pretty sure of this, but there is not mucj=h of an disadvantage in having a separate entity other than legal compliances and administrative expenses..

The share of profits wont b taxable in most cases and if there is somer double taxation due to the the JV being in a different tax jurisdiction, then the DTAA must be having something for the venturers.

 

Please further clarify ur doubt in case it is not resolved.

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