permanent establishment

Analysis of the word ‘Permanent Establishment’

Income Tax - The concept of Permanent Establishment is one of the most important concepts in International Taxation. The existence of a Permanent Establishment or otherwise, would in most cases determine the exposure to domestic tax liability in the country of source....

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Analysis of Supreme Court Judgments on Permanent Establishment

Income Tax - The general principle of taxation is that a person, who is resident of a country, would normally be taxable on his/its global income. However, as a rule of exception to this general principle, a person may also be taxed in the country of source i.e., the place where the business of a person is carried on, though he may be a resident of an...

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Union Budget 2018: Streamlining Business Connection in accordance with BEPS Action Plan

Income Tax - It has been widely reported that multinational corporations resort to base erosion and profit sharing (BEPS) techniques to shift their profit to tax havens or nations with lower tax incidence. ...

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Business Connection – A modified Permanent Establishment Rule!

Income Tax - India, amongst various countries, participated in the signing of the Multilateral Instrument (MLI) on 7 June 2017, to implement tax treaty related measures as a part of the various Base Erosion and Profit Shifting (BEPS) related Action Plans....

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Significant Economic Presence creates digital PE in India

Income Tax - India is one of the first movers of such digital PE taxation and is setting up precedence in the International Taxation. It might be a rightful move for the Indian Government to capitalize on the consumer base and get a share of the profits swept by the non-resident players exploiting the huge consumption market base....

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OECD releases a discussion draft on the definition of 'permanent establishment' in the OECD Model Tax Convention; CBDT invite Comments

Income Tax - The OECD Committee on Fiscal Affairs has proposed important and far-reaching changes to the Commentary on Article 5 (Permanent Establishment) of the OECD Model Tax Convention. As these changes will have an impact on India, the CBDT has, vide letter dated 8.11.2011, invited comments on the proposals before finalizing its view and sending ...

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MNC preferring dispute resolution panel to settle their disputes with Income tax department

Income Tax - A host of companies from Mumbai, said to be 367 in number and mostly multinational in nature, have moved the recently set up dispute resolution panel (DRP) to resolve issues related to cross-border taxation. An official in the I-T department said except two, all of the companies have chosen DRP instead of the conventional channel of appea...

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Double Taxation Avoidance Agreement Signed Between India and Tajikistan

Income Tax - A Double Taxation Avoidance Agreement was signed between India and Tajikistan today, i.e. 20th November, 2008. The Agreement was signed by Mr. Narendra Bahadur Singh,Chairman, Central Board of Direct Taxes on behalf of Government of India and by Mr. Norinov Jamshed Nurmahmadovich, Deputy Minister of Finance of the Republic of Tajikistan o...

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Duration of 12 months specified to constitute a PE is activity specific

Bellsea Ltd. Vs ADIT International Taxation (ITAT Delhi) - Onus is heavily upon the revenue to establish that that assessee's activity had crossed the threshold period of 12 months and hence constitutes PE in India in terms of Article 5(2)(g) so as to tax the receipts in India as per Article 7....

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Indian subsidiary does not constitutes a PE in India: ITAT Delhi

M/s. Nokia Networks OY vs. JCIT (ITAT Delhi) - Whether the Indian subsidiary of the assessee constitutes Permanent Establishment (PE) of the assessee in India on account of ‘signing, networking, planning and negotiation of offshore supply contracts in India’? If yes, whether any profit is attributable to the same, and the quantum thereof?...

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SC explains concept of fixed place of business, service PE and agency PE

ADIT Vs E-Funds IT Solution Inc (Supreme Court of India) - The Income Tax Act, in particular Section 90 thereof, does not speak of the concept of a PE. This is a creation only of the DTAA. By virtue of Article 7(1) of the DTAA, the business income of companies which are incorporated in the US will be taxable only in the US, unless it is found that they were...

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Permanent Establishment: A Recent Decision of Hon’ble Supreme Court

Formula One World Championship Ltd. vs. CIT International Taxation (Supreme Court) - In brief, the learned Judges of the Supreme Court held that FOWC carried on business in India for the duration of the race (and for two weeks before the race and a week thereafter). A PE must have three characteristics: stability, productivity and dependence....

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Taxability of business done by NRI through Power of Attorney holder

Carpi Tech SA Vs ADIT (ITAT Chennai) - Assessee submitted that project receipt from Tanakpur Power Project of NHPC work is exempt from tax in India for the reason that assessee does not have continuous presence or 'business connection' or a permanent establishment in India....

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Recent Posts in "permanent establishment"

Duration of 12 months specified to constitute a PE is activity specific

Bellsea Ltd. Vs ADIT International Taxation (ITAT Delhi)

Onus is heavily upon the revenue to establish that that assessee's activity had crossed the threshold period of 12 months and hence constitutes PE in India in terms of Article 5(2)(g) so as to tax the receipts in India as per Article 7....

Read More

Analysis of the word ‘Permanent Establishment’

The concept of Permanent Establishment is one of the most important concepts in International Taxation. The existence of a Permanent Establishment or otherwise, would in most cases determine the exposure to domestic tax liability in the country of source....

Read More
Posted Under: Income Tax |

Analysis of Supreme Court Judgments on Permanent Establishment

The general principle of taxation is that a person, who is resident of a country, would normally be taxable on his/its global income. However, as a rule of exception to this general principle, a person may also be taxed in the country of source i.e., the place where the business of a person is carried on, though he may be a resident of an...

Read More
Posted Under: Income Tax |

Indian subsidiary does not constitutes a PE in India: ITAT Delhi

M/s. Nokia Networks OY vs. JCIT (ITAT Delhi)

Whether the Indian subsidiary of the assessee constitutes Permanent Establishment (PE) of the assessee in India on account of ‘signing, networking, planning and negotiation of offshore supply contracts in India’? If yes, whether any profit is attributable to the same, and the quantum thereof?...

Read More

Union Budget 2018: Streamlining Business Connection in accordance with BEPS Action Plan

It has been widely reported that multinational corporations resort to base erosion and profit sharing (BEPS) techniques to shift their profit to tax havens or nations with lower tax incidence. ...

Read More
Posted Under: Income Tax |

Business Connection – A modified Permanent Establishment Rule!

India, amongst various countries, participated in the signing of the Multilateral Instrument (MLI) on 7 June 2017, to implement tax treaty related measures as a part of the various Base Erosion and Profit Shifting (BEPS) related Action Plans....

Read More
Posted Under: Income Tax |

Significant Economic Presence creates digital PE in India

India is one of the first movers of such digital PE taxation and is setting up precedence in the International Taxation. It might be a rightful move for the Indian Government to capitalize on the consumer base and get a share of the profits swept by the non-resident players exploiting the huge consumption market base....

Read More
Posted Under: Income Tax |

SC explains concept of fixed place of business, service PE and agency PE

ADIT Vs E-Funds IT Solution Inc (Supreme Court of India)

The Income Tax Act, in particular Section 90 thereof, does not speak of the concept of a PE. This is a creation only of the DTAA. By virtue of Article 7(1) of the DTAA, the business income of companies which are incorporated in the US will be taxable only in the US, unless it is found that they were PEs in India...

Read More

Permanent Establishment: A Recent Decision of Hon’ble Supreme Court

Formula One World Championship Ltd. vs. CIT International Taxation (Supreme Court)

In brief, the learned Judges of the Supreme Court held that FOWC carried on business in India for the duration of the race (and for two weeks before the race and a week thereafter). A PE must have three characteristics: stability, productivity and dependence....

Read More

Does constitution of “Service PE” entail physical presence of foreign personnel in host country?

Permanent Establishment (PE) is the fundamental criterion under the tax treaties for taxation of foreign company’s business income in India. A permanent establishment of a foreign company is typically regarded as a virtual extension or taxable presence of such foreign company in the host country, similar to that of an independent legal ...

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Posted Under: Income Tax |

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