This article is written by Krishnendra Joshi, Research Associate, LawSikho
How good is tax law as a career for lawyers?
Are you game for a career in tax law?
Tax law is a rewarding career option. Some of the greatest lawyers of our time started their career as tax lawyers. Just like some of the biggest law firms today started as tax law firms (think ELP, Nisith Desai Associates, LKS, Vaish Associates and many others). Even A of AZB is Ajay Bahl, who started out in tax.
If you want to know an area of law that has the least competition but the best rewards, it is tax law.
However, tax law is highly technical and complex to understand. It requires an analytical bent of mind. Your ability to interpret tax law keeps evolving over a period of time. Knowledge of related fields like accountancy and audit is also required.
Many lawyers think tax law requires great quantitative skills. This is mostly untrue. What it requires is strong work ethics, great conceptual clarity and ability to work with first principles. It is an area of law that engages your creativity and demands a lot of intellectual capacity.
Taxation related advisory has a direct bearing on the bottom line of businesses. Therefore one must possess the business acumen and commercial wisdom to think about the financial implications of a tax on the profits and liquidity of a company.
One has to bear in mind that the objective of charging tax is different. While Company law is directed towards the protection of investors, the aim of the tax law is to augment revenue for the state.
Tax law is responsive to the industry and keeps evolving rapidly. One is expected to stay abreast with the current developments and be on toes with regards to latest circulars, exemption notifications etc.
it is a wonderful career opportunity for those seeking a variety of cases, challenging situations and reward based experiential learning.
There is a need to make the study of tax law interesting and relevant
Law schools don’t focus on making tax law interesting enough. In many universities, it is offered as an optional subject, while in traditional universities, the focus is on the theoretical aspects of tax law. Not even the sections are properly covered! Newer concepts and developments in the field of tax law don’t even make the cut in the syllabus of many two-tier universities.
Don’t miss out because of Learned Helplessness
In such circumstances, law students in their formative years develop an aversion towards tax law. We often hear them saying that tax is boring, either you get it or don’t get it. And most don’t get it and avoid tax laws as a career option.
However such aversions towards a subject are mere mental blocks and limiting beliefs. Back in school, my maths teacher used to shout at me, so I developed an unconscious dislike for the subject in my formative years. And the aversion to tax law was also an extension of the same fear of numbers. Law school only reinforced it.
Likewise, many students miss out on the variety of opportunities tax law has to offer in terms of career prospects because of lack of practical oriented teaching methods. The skills required to succeed as a tax attorney can be acquired through systematic training and feedback, experiential and structured learning methods in line with the requirements of the industry.
Career opportunities and pathways are abundant for those who are willing to learn the tax-ropes
Firstly, tax law offers the widest variety of subfields to choose from. Nobody practices tax law. They practice a specific area of tax, such as indirect tax, direct tax, customs, trade tariffs, transfer pricing etc. The hurdle, however, is that a student is not exposed to the multiple career options tax law has to offer in the majority of law schools.
A student is only exposed to direct tax and indirect tax in separate semesters. He might learn to compute tax liability from gross total income under direct tax and computation of GST liability in a mechanical manner. Most study to just pass exams, and are out of steam by the final year when tax law courses are usually offered and just want to get done with the syllabus.
Have you ever thought that tax law has a constitutional law angle? That’s why tax lawyers become amazing constitutional lawyers eventually – from Harish Salve, Nani Palkhiwala to Arvind Datar.
That is a disconnect law schools have introduced into your thinking due to lack of systematic training around tax laws.
Understanding the Intricacies of tax law requires exposure and practice
The gamut of intricacies and complex situations that might arise in a tax dispute or taxation aspect of a transaction such as an M&A deal or investment transaction are not taught. You may not have even thought that stamp duty is a kind of tax too.
One might learn about minimum alternate tax in law school, however, one does not know its implications from a commercial perspective, its impact on the bottom line of the company or an individual’s business, the impact of non-cash transactions on the liquidity of the company, depreciation. A sound understanding the financial statements of the company is required to go about understanding MAT implications but where do you learn that from?
A case study based approach is the need of the hour
Did you hear about the recent Angel tax controversy? Angel tax levied on the startup Travelkhana has wiped off its bank accounts and has left the company in jeopardy. Angel tax is basically a tax levied on your company’s “investment income”.
On one side, the government is promoting make in India drive, aggressively granting exemptions to them, while on the other hand, such unprecedented tax levies are curtailing the spirit of the startup ecosystem in India. This gave an unprecedented opportunity to tax lawyers to engage in policy discourse of the country, make representations to the government as well as an opportunity to fight these cases in the court.
How do you go about advising your clients in such situations? You require a case study based systematic approach focused on current developments around the law and even advice them about how likely they are to win if a constitutional or some other challenge is mounted in tribunals or courts.
Therefore, training of a tax lawyer must inculcate a trait of understanding the bigger context of tax laws and the understanding of how the tax law is evolving in response to industry requirements and representations.
You can be an asset for any organization you work with if you can interpret tax laws of multiple jurisdictions
International taxation gains traction in a global business environment. Companies are operating in a global environment. Offices are located in multiple jurisdictions. International transactions are growing at unprecedented speed.
Students and young professionals don’t get enough exposure and practice to master the concepts of transfer pricing. What if your branch office and head office is situated in two different tax jurisdictions. What will be the rate of taxation applicable to such cases?
What if there is a bilateral treaty in this regard between the two countries? How do you understand and interpret such treaties? There can be multiple complicated scenarios in such cases.
International trade is opening up. The ‘Make in India’ initiative is encouraging foreign investors to do business in India. International taxation and transfer pricing regulations are only going to gain impetus in the current scenario. It is a rewarding career option once you get a grasp on structuring an international transaction.
It requires an understanding of the micro and macro business and economic policies. One can create a niche for himself if he trains himself across various practical situations and taxation different transactions either through internships or taking an online course like this on transfer pricing.
GST advisory has gained prominence
The advent of GST in indirect law practice has opened gates both in advisory and indirect tax law litigation. The GST law is constantly evolving offering a lot of scope for open-ended interpretation. Exemption notifications are issued regularly keeping the requirements of industry in mind. A lot of confusion arises in its interpretation in the industry.
There is tremendous opportunity in consulting companies on GST at present.
What if an Exemption contemplated by the department becomes cost itself
No law can cover all the business situations in entirety. For eg: storage and warehousing of agricultural commodities has been given exemption under GST. however, what happens when rented warehouse premises are used for producing agricultural commodities. Rented warehousing is not covered under the exemption. GST liability becomes a cost to the farmer. So ultimately the GST exemption benefit contemplated in law is not passed to the farmer. Lawyers are taking up these matters and making a difference to the country’s economy. There are tons of such opportunities for tax lawyers in India arising almost every single day.
Conflicting interpretations offer a lot of scope for interpretation and therefore litigation
Do you know the household coconut hair oil has been proved to be of primary use as an edible oil instead of a cosmetic product? There have been landmark battles fought on the interpretation and classification of foodstuffs like Avla. GST law is still in its infancy so there is a lot of conflicting interpretations.
In almost every industry there are such issues that only makes the lawyer’s client portfolio larger. This is not going to change, probably not even if we look at what happened in advanced economies in Europe and North America.
Customs law is a maze for many
Customs law is a small area which is neglected by the majority owing to the technical nuances involved in understanding the law. Many CA students would tell me that they find something as basic as import procedure under customs law very difficult to master.
Terms like shipping bill, import manifest, bill of entry, into the bond bill of entry, derelict, jetsom, flotsam ring new to the ears. Can you imagine if someone decides to make it all interesting and make a career in it? it can open avenues for providing customs tax advisory.
Common examples requiring tax planning services
Besides all these areas, different business structures are taxed differently.
There are people earning their bread for providing tax advisory to NRIs on structuring their transactions and investments in India.
The common man is most eager to know the tax benefits available on his gross total income in the form of exemptions, deductions, eligible investments that can help in tax savings. Tax benefits available while computation salary or taking a house loan for buying and investing in house property.
Businesses want to know about allowable and not allowable expenses while making their profit and loss Account otherwise they will claim any amount as a deduction to show lesser profits so that there is a minimal tax liability on them.
The point that I am trying to drive home is there is a lot of scope for tax planning for individuals and businesses and structuring a transaction under direct as well as indirect taxation. While calculating taxable liability is taught in law schools, tax planning, and tax management is a play between analysis, interpretation, and understanding of the industry. It comes from experience and training.
Whether to choose tax advisory or tax litigation depends on your skill sets, temperament, and personality
One also needs to keep in mind that tax litigation is highly competitive. Tax is a very specialized field. The litigation scene is dominated by a handful of experienced lawyers. Can you break into that circle of elite lawyers?
It is not easy to get into tax litigation because what is at stake is huge, enormous sums of money. People do not trust newcomers. But if you give a few years and build that trust, and the reputation, the only sky’s the limit as far as earning potential is concerned.
Have you ever met a poor tax lawyer? I doubt.
Even junior lawyers are paid much, much better in tax compared to the rest of the litigation world.
Salary and career prospects for tax lawyers
Tier 1 firms offer salaries in the range of 14-15 lakhs for freshers. The starting salary in a tier 2 firm is around 7 lakhs. However, they require prior demonstrable experience. Or, demonstrable skills and tremendous potential. I am not joking when I say that it is easier to get into the M&A team of a big law firm compared to tax law teams. It is also easier because so few even try, but difficult because they are ready to forego taking any novices in and favour more experienced lawyers.
A lot of Chartered Accountants acquire such skills during articles. Law students can undergo multiple internships and industry oriented courses. Young law graduates can target mid-size law firms to learn the ropes and move up the ladder in a couple of years after acclimatizing themselves with the industry.
Our Approach to teaching tax laws
We spoke to a lot of students and realised that a more robust, pragmatic and flexible approach is required to teach and train students and young professionals on tax law. Ultimately gaining expertise in any area comes down to repetition, exposure, constant feedback and engagement.
Our team at LawSikho.com got in touch with industry professionals to understand the gap in skills available and the gap in skills desired by the industry and we have come up with the most cutting edge tax law course aimed to bridge the skill and training lag in the Industry.
Benefits of doing the online corporate tax law course
Flexible Online 24/7 access
Access to basic study material through an online learning management system, Android and IoS App
Hard Copy Study Material available for reference
Hard copy study material modules to be couriered to your address
Regular Practical Exercises
2 practical exercises every week, followed by written comments and feedback on output
Live Online Classes
Based on the exercises, there will be a live video-based online class. You can ask questions, share your screen, get personal feedback in this class.
Convenient Class timings
Classes are held after regular work hours. Typically classes are kept on Sunday afternoon, Saturday evening or 8-9 pm on other days.
Live Doubt Clearing
You can ask questions, get your doubt cleared live as well as through online Q&A system within LMS or our support group chat.
To enroll for the certification course in advanced corporate taxation click here.
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