Infosys still in talks with consultants on tax issue

By siliconindia staff writer   |   Wednesday, 17 March 2004, 08:00 Hrs
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NEW DELHI : Software major Infosys Technologies said on Tuesday it is in discussions with consultants on the California tax issue while maintaining that either way it would have minimum impact on the company.

"We are in discussions with tax consultants in this regard. Based on these consultations, we will decide the next step. We have paid all taxes and have asked for a way in which computation of taxes would take into account the fact that 70 per cent of the work is done remotely by us", Kris Gopalakrishnan, COO and Deputy MD, Infosys Technologies, said on the sidelines of a CII summit.

"Either way, we will bear minimum impact as the tax amounts to a million dollar against a revenue of $1 billion and it is not a federal tax, but a state tax," he said.

"But we need to set a precedent. The concept of globalisation is a new concept. We are trying to figure out the way as 70 per cent of the job is done remotely by Infosys", he added.

Infosys, which has its US headquarters in California , got a setback when the state administration rejected its plea seeking tax relief under an alternative filing methodology permitted by the state tax code.

It had sought relief citing that the standard tax formula computed by the state failed to take into account that two-thirds of Infosys project work was done offshore in India , and that there was a differential in the wages between its staff in India and that in California .

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