Tiger Global's Offshore Playbook Takes a Hit as India's Top Court Rules Against Them
In a significant blow to global funds relying on offshore structures, India's top court has ruled against Tiger Global in a tax case tied to the Walmart-Flipkart deal. The decision strengthens New Delhi's ability to challenge offshore treaty structures and could raise tax risk for investors counting on predictable exits from one of the world's fastest-growing major markets.India's Supreme Court Backs Tax Authorities in Dispute
The Indian Supreme Court has upheld a 2020 order by the Authority for Advance Ruling, which found that Tiger Global was prima facie avoiding tax and therefore not eligible for treaty relief. This decision sets aside a 2024 Delhi High Court ruling that had overturned the original order.
Tiger Global's Offshore Strategy Under Scrutiny
The case revolves around Tiger Global's use of its Mauritius-based entities to claim protection under the India-Mauritius tax treaty. The firm had argued that it was entitled to treaty relief, but the court has now ruled against them, dealing a significant blow to their offshore playbook.
Implications for Global Funds and Investors
The decision could have far-reaching implications for global funds relying on offshore structures. It strengthens New Delhi's ability to challenge offshore treaty structures and could raise tax risk for investors counting on predictable exits from India. This development is particularly significant given India's growing importance as a major market, with many global funds eyeing opportunities in the country.
The ruling against Tiger Global marks a significant shift in the landscape of offshore investments in India. As the country continues to grow and attract foreign investment, this decision sends a clear message that New Delhi will not tolerate tax avoidance schemes. The implications for global funds and investors are far-reaching, and it remains to be seen how they will adapt to this new reality.
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