NEW EU VAT RULE TO MAKE OFF- SHORING COSTLIER BY 15%
- The 27-nation bloc has imposed value-added tax (VAT) from January 1, 2010, on services delivered from non-EU nations such as India.
- The new value-added tax (VAT) rule introduced by the European Union from January this year, will make offshoring costlier for banking and healthcare customers in the region by up to 15%, and squeeze margins of India's top tech firms including Tata Consultancy Services (TCS), Infosys and Wipro.
- New VAT regime define place of supply as buyer's location, making offshore service, such as banking and healthcare, VAT liable.
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