India’s government has approved regulatory changes that will allow Apple to directly finance iPhone manufacturing equipment in the country without additional taxes, reports Reuters (a subscription is required to read the article).
The tech giant had been lobbying India’s government to modify its income tax laws to ensure it’s not taxed for ownership of the high-end iPhone machinery it provides to its contract manufacturers.
As noted by Reuters, in India, unlike China, Apple was concerned that if it paid for machines for its contract manufacturers, Indian law could consider that a so-called “business connection” and impose taxes on its iPhone sales profits. That had forced its contract manufacturers Foxconn (2317.TW), opens new tab and Tata to themselves spend billions of dollars on machines.
However, Revenue Secretary Arvind Shrivastava confirmed the change, stating that “if you bring your machine, and that machine is used by a local manufacturer to produce something, we will … exempt you for 5 years,” according to Reuters.
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