### 📈 Tiger Global Ruling: Tightening the Net on Tax Avoidance

A landmark January 2026 Indian Supreme Court ruling in Tiger Global v. AAR signals a major shift toward "substance over form," carrying significant implications for cross-border investments and Sri Lanka’s own tax landscape. • The Ruling Highlights The Court denied tax treaty benefits to Mauritius-based entities for the indirect sale of Flipkart shares. Key takeaways include: TRC Limitations: A Tax Residency Certificate is no longer "conclusive proof" of treaty entitlement if the entity lacks commercial substance. Substance Over Form: Authorities can "look through" structures. In this case, control was found to be in the US, not Mauritius. GAAR Supremacy: General Anti-Avoidance Rules (GAAR) can override tax treaties in cases of "impermissible avoidance arrangements." • Comparison: Vodafone vs. Tiger Global Vodafone (2012): Favored taxpayers, emphasizing literal interpretation and legal form. Tiger Global (2026): Favors tax authorities, prioritizing economic reality and value creation over "paper situs." • Implications for Sri Lanka Section 35 (IRA): Sri Lanka’s Inland Revenue Act contains similar GAAR provisions, empowering the Commissioner General to disregard "artificial or fictitious" schemes. Indirect Transfers: Under local law, shares in non-resident companies are deemed "domestic assets" if >50% of their value derives from land or buildings in Sri Lanka. Precedent: The ruling may embolden Sri Lankan authorities to more aggressively scrutinize multi-tiered offshore structures used for ICT/BPM or real estate investments. _Note: Analysis based on provisional January 2026 judicial data._ ---