Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
Beer market of Vietnam: “Young tiger”Vietnam is one of the few big beer markets that continue to grow steadily. The beer popularity results from its low price, street consumption culture, and social motives. The outlooks of beer market as well as the Vietnamese economy inspire optimism, though the country is heavily dependent on export of goods. The state regulation can be called liberal, but the key risk for brewers is harbored in intensive rising of excise. Within TOP-4 there are two leaders, Sabeco and Heineken that grow at the fastest rates. The first company effectively employs its capacities, the second one focuses on marketing technologies. Almost 80% of the market belongs to century-old brands, yet the middle class and the youth are shifting their interest toward international premium that is growing taking share from the mainstream.
Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
India. Cross-border transfers of intangible assets by foreign entities not taxable: Delhi HC
The Delhi High Court recently passed a long-awaited judgment against attempts by Indian revenue authorities to tax capital gains on cross-border transfers of intangible assets by foreign entities.
As a result of this latest clarification, only capital gains made by foreign entities on cross-border share transactions would henceforth be taxable by Indian authorities under Section 9 of the Income Tax Act.
The landmark verdict was delivered on a challenge made by Foster’s Australia to a May 2008 Authority of Advance Rulings (AAR) determination which deemed the transfer of intangible assets associated with British beer manufacturer SABMiller’s acquisition of Foster’s India over 10 years ago as taxable under Indian law.
The Indian tax authorities had supported the AAR decision on the ground that the transfer of the Foster’s brand name for use in India was taxable as it had acquired domestic licences and gained substantial value through business conducted in this country.
In contrast, Foster’s Australia relied on a strict interpretation of Section 9 of the Income Tax Act, 1961, and contended that the income arising out of a transfer of a brand name could not be taxed in India if the intellectual property rights were held by a foreign entity.
The high court eventually agreed with the Foster’s Australia submissions and contended that the permission given to SABMiller to utilise the brand name was, in fact, a mere “user right” transferred by an overseas body and not amenable to taxation in India under Section 9.
While interpreting the relevant retrospective provision, the court held that the law had created a deeming provision for taxability of capital gains made on indirect transfers of capital assets alone and would not apply to intangible assets such as brand names or logos.
In the absence of a specific provision on the issue, the court concluded that international merger and acquisition norms permitting taxation only at the proprietary location of an asset were to be followed. As such, only the parent country of the transferor would have a right to such taxation, regardless of the usage of the asset in question.
According to Ketan Dalal, senior tax partner, PricewaterhouseCoopers, the judgment was a well-reasoned one. “The fact that a brand has generated goodwill in India or was nurtured here are irrelevant for the purposes of taxation,” said Dalal. “Given the increasing importance of intangible assets and transactions of such nature, international companies will certainly get comfort that one potential hurdle in relation to such transactions seems to have been addressed. Now one only hopes that the tax department will accept this judgment and not take the matter to the Supreme Court.”
- Capital gains made by foreign entities on cross-border share transactions would be taxable
- The landmark verdict was delivered on a challenge made by Foster’s Australia to a May 2008 Authority of Advance Rulings
- The court concluded the international merger and acquisition norms permitting taxation only at the proprietary location of an asset were to be followed
- Only the parent country of the transferor would have a right to such taxation, regardless of the usage of the asset in question
28 Jul. 2016