permanent establishment

Has the AAAR fixed the ‘fixed establishment’ under GST?

Income Tax - The ‘fixed establishment’ could pose yet another challenge to the ‘One nation One tax’ theory unless more clarity is brought to the definition similar to (or even better than) ‘Permanent Establishment’ defined under the Income Tax Act, 1961 read with DTAAs entered into with various countries....

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Common strategies used to avoid Permanent Establishment status

Income Tax - Avoidance of Permanent Establishment (PE) status of Non-Residents are made through various arrangements. Company structures their business in way that status of PE can artificially be avoided. The definition of permanent establishment included in tax treaties is therefore crucial in determining whether a non-resident enterprise must pay i...

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Preparatory & Auxiliary activities in Permanent Establishment: How does India cope with the dearth in determining provisions?

Income Tax - With the incessant global growth, the relevance of Permanent Establishment (PE) in international taxation has become paramount. In simpler terms, the expression ‘Permanent Establishment’ means a fixed place of business through which the business of an enterprise is wholly or partly carried on....

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Are you creating a Dependent PE taxable in India by appointing a sales agent in India ?

Income Tax - A foreign entity in Japan is appointing an sales agent in India to market and sell their products. They are not setting up an Indian entity, not hiring an employee in India but only appointing a full time agent in India. Can such a person be construed as a permanent establishment (PE) for the Japanese […]...

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Clarity finally delivered on long standing issue of Permanent Establishment exposure for Liaison Offices in India!

Income Tax - Multi-National Companies (‘MNCs’) are allowed to set up their presence in India subject to the Foreign Direct Investment policy and other relevant regulations. One such presence that MNCs typically try to build is in the form of a liaison office (‘LO’) in India. Such offices are set up by foreign enterprises to understand the Indi...

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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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In absence of PE Training charges cannot be taxed as Business Income under DTAA with Sweden

Sandvik AB Vs DCIT (ITAT pune) - Sandvik AB Vs DCIT (ITAT pune) We find that the assessee characterized the receipt of Training fee as a consideration for `managerial’ services within the overall ambit of Article 12 and the Revenue also accepted the same as falling under that Article but as `consultancy or technical’ service. W...

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Income from sale of software constitutes business income instead of royalty in absence of PE

Norton Lifelock Inc. Vs DCIT (IT) (ITAT Pune) - Income earned by assessee from sale of software, either directly to the customers in India or through Distributors or Resellers constituted its business income and not the Royalty income. As admittedly assessee did not have any Permanent Establishment in India, such income will not magnetize Indian ...

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Indian liaison office of UAE Company engaged in fund remittance services not constitute a PE in India

Union of India Vs U.A.E. Exchange Centre (Supreme Court) - Union of India Vs U.A.E. Exchange Centre (Supreme Court) Respondent was not carrying on any business activity in India as such, but only dispensing with the remittances by downloading information from the main server of respondent in UAE and printing cheques/drafts drawn on the banks in India as per...

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MIPL is not a Dependent Agent PE of Mitsui & Co. Ltd

DDIT Vs Mitsui & Co. Ltd. (ITAT Delhi) - DDIT Vs Mitsui & Co. Ltd. (ITAT Delhi) Learned DR contended that MIPL is economically dependent on assessee company as major revenue of MIPL is from assessee company. We are of the view that this per se cannot be ground to hold that MIPL is a Dependent Agent. For invoking this clause, first one ...

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Mitsui India is not a Dependent Agent Permanent Establishment of Mitsui, Japan

ACIT Vs Mitsui & Co. Ltd. (ITAT Delhi) - ACIT Vs Mitsui & Co. Ltd. (ITAT Delhi) The facts in brief are that the assessee-company is incorporated in Japan and had a subsidiary in India, Mitsui India Pvt. Ltd. (MIPL). In India, assessee has undertaken several projects in connection with big natural installment and power projects during t...

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Amendment of Rules for Profit attribution to PE: CBDT invites comment

F. No. 500/33/2017-FTD.I - (18/04/2019) - Public Consultation on the proposal for amendment of Rules for Profit attribution to Permanent (PE) Establishment invited by CBDT. Under Article 7 in the Indian treaties, profits are to be attributed to the PE as if it were a distinct and separate entity on the basis of the accounts of the PE and wh...

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permanent establishment’s Popular Posts

Recent Posts in "permanent establishment"

In absence of PE Training charges cannot be taxed as Business Income under DTAA with Sweden

Sandvik AB Vs DCIT (ITAT pune)

Sandvik AB Vs DCIT (ITAT pune) We find that the assessee characterized the receipt of Training fee as a consideration for `managerial’ services within the overall ambit of Article 12 and the Revenue also accepted the same as falling under that Article but as `consultancy or technical’ service. We have held supra that the Training [&he...

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Income from sale of software constitutes business income instead of royalty in absence of PE

Norton Lifelock Inc. Vs DCIT (IT) (ITAT Pune)

Income earned by assessee from sale of software, either directly to the customers in India or through Distributors or Resellers constituted its business income and not the Royalty income. As admittedly assessee did not have any Permanent Establishment in India, such income will not magnetize Indian taxation....

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Indian liaison office of UAE Company engaged in fund remittance services not constitute a PE in India

Union of India Vs U.A.E. Exchange Centre (Supreme Court)

Union of India Vs U.A.E. Exchange Centre (Supreme Court) Respondent was not carrying on any business activity in India as such, but only dispensing with the remittances by downloading information from the main server of respondent in UAE and printing cheques/drafts drawn on the banks in India as per the instructions given by the NRI [&hel...

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Has the AAAR fixed the ‘fixed establishment’ under GST?

The ‘fixed establishment’ could pose yet another challenge to the ‘One nation One tax’ theory unless more clarity is brought to the definition similar to (or even better than) ‘Permanent Establishment’ defined under the Income Tax Act, 1961 read with DTAAs entered into with various countries....

Read More
Posted Under: Income Tax |

MIPL is not a Dependent Agent PE of Mitsui & Co. Ltd

DDIT Vs Mitsui & Co. Ltd. (ITAT Delhi)

DDIT Vs Mitsui & Co. Ltd. (ITAT Delhi) Learned DR contended that MIPL is economically dependent on assessee company as major revenue of MIPL is from assessee company. We are of the view that this per se cannot be ground to hold that MIPL is a Dependent Agent. For invoking this clause, first one of […]...

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Mitsui India is not a Dependent Agent Permanent Establishment of Mitsui, Japan

ACIT Vs Mitsui & Co. Ltd. (ITAT Delhi)

ACIT Vs Mitsui & Co. Ltd. (ITAT Delhi) The facts in brief are that the assessee-company is incorporated in Japan and had a subsidiary in India, Mitsui India Pvt. Ltd. (MIPL). In India, assessee has undertaken several projects in connection with big natural installment and power projects during the relevant year through its project off...

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Revenue Generated from Bookings Made within India Attributable to PE, Hence Taxable in India

DDIT Vs Travelport L.P. USA (ITAT Delhi)

The issue under consideration is whether revenue generated from the bookings made within India is the revenue attributable to the PE of the assessee is taxable in India?...

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TDS not deductible on Agency Commission paid to Overseas Agents not having PE in India

DCIT Vs Shamrock Pharmachemi Pvt.Ltd. (ITAT Mumbai)

DCIT Vs Shamrock Pharmachemi Pvt.Ltd. (ITAT Mumbai) We find that assessee is engaged in the business of trading activity of import and export of pharmaceutical ingredients, chemicals and intermediates. We find that the assessee debited a sum of Rs. 4,18,50,792/- in its profit and loss account towards export commission paid to overseas age...

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Common strategies used to avoid Permanent Establishment status

Avoidance of Permanent Establishment (PE) status of Non-Residents are made through various arrangements. Company structures their business in way that status of PE can artificially be avoided. The definition of permanent establishment included in tax treaties is therefore crucial in determining whether a non-resident enterprise must pay i...

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Posted Under: Income Tax |

Liaison Office & Land Earth Station not Constitute PE in India

Inmarsat Global Ltd. Vs DCIT (International Taxation) (ITAT Mumbai)

The issue under consideration is whether DRP is correct in considering the Liaison Office (LO) and Land Earth Station ('LES') constitutes a permanent establishment (PE) in India?...

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