Taxation of Permanent Establishments: an International Perspective

  • ID: 1580338
  • Book
  • Region: Global
  • 547 Pages
  • Spiramus Press
1 of 5
The dramatic advances in communications and technology that have taken place in recent years, combined with the progressive development of the Indian economy, have enticed many multi-national companies to tap the rich resources which India has to offer in terms of front-line business support services and customer relations.

This has thrust the Indian tax system into the limelight, with multi-nationals and their advisers now needing to become familiar with the relevant aspects of Indian tax law and practice, and in particular, how India approaches the concept of the permanent establishment and the circumstances in which a liability to tax in India could arise.

This book’s principal theme is the taxation of permanent establishments, taking as its starting point the OECD model convention on the avoidance of double taxation, and examining how the Indian courts and India’s law-makers have interpreted the rules governing attribution of profits.

It deals with the current issues to which the establishment of business centres in India by multi-nationals have given rise, relating how the law is developing to take account of these latest international business trends.
Note: Product cover images may vary from those shown
2 of 5
FOREWORD
PREFACE
ABOUT THE AUTHOR
ACKNOWLEDGEMENTS
LIST OF ABBREVIATIONS
CASES CITED / DISCUSSED
CIRCULARS CITED / ANALYSED
CHAPTER 1: TAXATION OF BUSINESS PROFITS
1.1 TAXATION OF AN ‘ENTERPRISE’
1.1.1 Taxation of a resident v. taxation of an enterprise
1.1.2 Permanent Establishment of an enterprise v. Permanent Establishment of a resident
1.1.3 Business profits of an enterprise v. business profits of a resident
1.1.4 Expenditure of an enterprise v. expenditure of a person
1.1.5 Reference in OECD Discussions drafts on Attribution of Profits to Permanent Establishment
1.1.6 DTAAs not referring to ‘enterprise’
1.1.7 ‘Enterprise’ under the DTAA v. ‘Enterprise’ in terms of the domestic law
1.2 TAXATION OF ‘BUSINESS PROFITS’
1.2.1 General meanings of ‘business’
1.2.2 ‘Business’ in terms of the domestic law
1.2.3 ‘Business’ in terms of DTAA
1.2.4 Business Income v. Investment Income
1.2.5 Does DTAA determine character of the income?
1.3 RATE OF TAX APPLICABLE TO THE PROFITS OF A PERMANENT ESTABLISHMENT
1.4 SPECIAL TREATMENT TO INSURANCE BUSINESS
CHAPTER 2: PARA 1 OF ARTICLE 7
2.1 TAXATION OF PROFITS OF PERMANENT ESTABLISHMENT IN THE COUNTRY OF RESIDENCE
2.1.1 Alternate view – no taxation in the country of residence
2.1.2 Decisions dealing with taxation of profits attributable to the Permanent
Establishment in the country of source
2.2 “PROFITS OF AN ENTERPRISE”
2.2.1 The relevant business activity approach
2.2.2 Functionally separate entity approach
2.2.3 Can the profits taxable in the country of Permanent Establishment exceed the overall profits of the enterprise?
2.3 ATTRIBUTION OF PROFITS
2.3.1 What is “Attributable to”?
2.3.2 Why to attribute?
2.3.3 How to attribute?
2.3.4 “Attributable to” in terms of the domestic law
2.4 VARIATIONS OF PARA 1 OF ARTICLE 7
2.4.1 DTAAs signed by India
2.4.2 DTAAs signed by UK
2.4.3 DTAAs signed by USA
2.4.4 DTAAs signed by Netherlands
2.4.5 DTAAs signed by China
CHAPTER 3: FORCE OF ATTRACTION RULE
3.1 FORCE OF ATTRACTION RULE
3.1.1 Role of Permanent Establishment in direct business?
3.1.2 Extent of attribution
3.1.3 ‘Force of attraction and Article 11(4), 12(3) etc
3.1.4 Period of Permanent Establishment and ‘force of attraction rule’
3.1.5 Uncertainties arising from ‘force of attraction rule’
3.2 HIDDEN FORCE OF ATTRACTION RULE OR EXTENSION OF ARTICLE 7?
3.2.1 Article 10(4)
3.2.2 Article 11(4)
3.2.3 Article 12(3), Article 13(3) and Article 21(2)
3.2.4 Payment by Permanent Establishment – Effective connected?
3.2.5 Criteria for ‘effectively connected’
3.2.6 Distinction between ‘force of attraction rule’ and Articles 10(4), 11(4), 12(3), 21(2)
3.3 INTERPLAY BETWEEN ‘FORCE OF ATTRACTION RULE’ AND OTHER FORMS OF PERMANENT ESTABLISHMENT
3.4 INTERPLAY OF ‘FORCE OF ATTRACTION RULE’ AND PARA 2 OF ARTICLE 7 OF THE US MODEL
3.5 ‘FORCE OF ATTRACTION RULE’ UNDER THE ITA
3.6 VARIATIONS OF ‘FORCE OF ATTRACTION RULE’
3.6.1 DTAAs signed by India
3.6.2 DTAAs signed by UK
3.6.3 DTAAs signed by USA
3.6.4 DTAAs signed by Netherlands
3.6.5 DTAAs signed by China
CHAPTER 4: PARA 2 OF ARTICLE 7
4.1 ANALYSIS OF CERTAIN TERMS USED IN PARA 2 OF ARTICLE 7
4.1.1 Distinct
4.1.2 Separate
4.1.3 Same
4.1.4 Similar
4.1.5 Wholly Independently
4.1.6 There shall in each Contracting State be attributed to that permanent establishment
4.1.7 “With the enterprise of which it is a permanent establishment”
4.2 PROFITS ATTRIBUTABLE UNDER ARTICLE 7 OF THE DTAA V. UNDER SECTION 9 OF ITA
4.3 PROFITS FROM SELF
4.4 SUMMARY OF OECD COMMENTARY ON PARA 2 OF ARTICLE 7
4.5 VARIATIONS OF PARA 2 OF ARTICLE 7
4.5.1 DTAAs signed by India
4.5.2 DTAAs signed by UK
4.5.3 DTAAs signed by USA
4.5.4 DTAAs signed by Netherlands
CHAPTER 5: PROFITS FROM TRANSACTIONS WITH SELF
5.1 CAN A PERSON EARN PROFITS FROM HIMSELF BY TRADING WITH HIMSELF?
5.1.1 Cases rejecting the possibility of profits from self
5.1.2 Cases permitting profits from self
5.2 CAN ONE SELL GOODS TO HIMSELF?
5.3 CAN ONE PAY DIVIDEND TO SELF
5.4 DOES THE LAW REQUIRE DEDUCTION OF TAX FROM PAYMENT TO SELF?
5.5 CAN A PERSON MAKE INVESTMENTS IN ITSELF?
5.6 SPECIFIC PROVISIONS OF LAW
5.6.1 Transfer pricing provisions
5.6.2 Conversion of capital asset into stock in trade
5.7 CONCLUSION
CHAPTER 6: PARA 3 OF ARTICLE 7 - OECD MODEL
6.1 DEDUCTIONS SUBJECT TO THE PROVISIONS OF THE DOMESTIC LAW
6.2 METHOD OF COMPUTATION OF BUSINESS INCOME
6.3 DO ALL THE PROVISIONS OF THE ITA BECOME APPLICABLE?
6.4 PERMANENT ESTABLISHMENT AND MAT
6.5 PROVISIONS OF ARTICLE 7(3) AND PRESUMPTIVE TAXATION
6.6 SUMMARY OF OECD COMMENTARY ON PARA 3 OF ARTICLE 7
6.7 CALCULATION OF INCOME OF PERMANENT ESTABLISHMENT AS PER OECD
COMMENTARY
6.8 CALCULATION OF INCOME OF PERMANENT ESTABLISHMENT AS PER OECD
DISCUSSION DRAFT
6.9 CONFLICT BETWEEN PARA 2 AND PARA 3 OF ARTICLE 7
6.10 VARIATIONS OF PARA 3 OF ARTICLE 7
6.10.1 DTAAs signed by India
6.10.2 DTAAs signed by UK
6.10.3 DTAAs signed by USA
6.10.4 DTAAs signed by Netherlands
6.10.5 DTAAs signed by China
Appendix A
CHAPTER 7: PARA 3 OF ARTICLE 7 -UN MODEL
7.1 NATURE OF EXPENSES ALLOWED / DISALLOWED
7.2 DEDUCTIBILITY OF INCOME GENERATING ITEMS FOR THE ENTERPRISE
7.3 SHOULD THE HO & PERMANENT ESTABLISHMENT BOTH BE ENGAGED IN BANKING ACTIVITIES?
7.4 CONNOTATION OF 'REIMBURSEMENT OF ACTUAL EXPENSES'
7.4.1 Cash outflow
7.4.2 Specific expenses v. allocation of general expenses
7.5 PAYMENTS TO THE SAME ENTITY V. PAYMENTS TO THE SAME ENTERPRISE
7.6 CONFLICT BETWEEN ARM’S LENGTH PRINCIPLE AND PARA 3 OF ARTICLE 7
7.7 INCOME OF THE PERMANENT ESTABLISHMENT FROM THE HEAD OFFICE
7.8 VARIATIONS OF PARA 3 OF ARTICLE 7 OF THE UN MODEL
7.8.1 DTAAs signed by India
7.8.2 DTAAs signed by UK
7.8.3 DTAAs signed by USA
7.8.4 DTAAs signed by Netherlands
7.8.5 DTAAs signed by China
CHAPTER 8: PARA 4 OF ARTICLE 7
8.1 DIFFERENCE BETWEEN PARAGRAPH 24 AND 25 OF THE OECD COMMENTARY ON ARTICLE 7
8.2 UNDER WHAT CIRCUMSTANCES APPORTIONMENT METHOD CAN BE APPLIED?
8.3 APPLICATION OF PARA 4 TO A NEW LINE OF BUSINESS
8.4 REQUIREMENT OF CONSISTENT RESULTS WITH ARM’S LENGTH METHOD
8.5 WHAT IS ‘CUSTOMARILY FOLLOWED’?
8.5.1 Can a method prescribed by the law be considered as a ‘customary method’?
8.5.2 Can an administrative practice adopted by the tax authorities be considered as a ‘customary method’?
8.6 CUSTOMARY METHODS IN INDIA
8.7 PRESUMPTIVE TAXATION AND ARTICLE 7
8.8 GLOBAL FORMULARY APPORTIONMENT METHOD
8.9 VARIATIONS OF PARA 4 OF THE MODEL CONVENTION
8.9.1 DTAAs signed by India
8.9.2 DTAAs signed by UK
8.9.3 DTAAs signed by USA
8.9.4 DTAAs signed by Netherlands
8.9.5 DTAAs signed by China
CHAPTER 9: PARA 5 OF ARTICLE 7
9.1 ‘PROFITS’ IN TERMS OF PARA 5 OF ARTICLE 7
9.2 ‘MERE PURCHASE’
9.3 PURCHASE OF GOODS FROM OTHER COUNTRIES
9.4 PURCHASE FOR OTHER ENTERPRISE
9.5 PURCHASES FOR THE PERMANENT ESTABLISHMENT
9.6 PURCHASE OF CAPITAL ASSETS
9.7 APPLICABILITY OF PARA 5 TO PURCHASE OF SERVICES
9.8 OTHER PREPARATORY AND AUXILIARY SERVICES
9.9 DELIVERY OF GOODS TO THE PERMANENT ESTABLISHMENT
9.10 VARIATIONS OF PARA 5 OF ARTICLE 7
9.10.1 DTAAs signed by India
9.10.2 DTAAs signed by UK
9.10.3 DTAAs signed by USA
9.10.4 DTAAs signed by Netherlands
9.10.5 DTAAs signed by China
CHAPTER 10: PARA 6 & 7 OF ARTICLE 7 OF OECD MODEL, OTHER PARAS OF US MODEL AND OTHER PROVISIONS OF ARTICLE 7
10.1 PARA 6 OF ARTICLE 7
10.1.1 ‘Good and sufficient nature’, subjective terms
10.1.2 Implications of the words ‘for the purpose of preceding paragraphs’
10.2 VARIATIONS OF PARA 6 OF ARTICLE 7
10.2.1 DTAAs signed by India
10.2.2 DTAAs signed by UK
10.2.3 DTAAs signed by USA
10.2.4 DTAAs signed by Netherlands
10.2.5 DTAAs signed by China
10.3 PARA 7 OF ARTICLE 7
10.3.1 Desired positions
10.3.2 Rationale
10.4 VARIATIONS OF PARA 7
10.4.1 DTAAs signed by India
10.4.2 DTAAs signed by UK
10.4.3 DTAAs signed by USA
10.4.4 DTAAs signed by Netherlands
10.4.5 DTAAs signed by China
10.5 OTHER CLAUSES IN THE US MODEL
10.5.1 Para 7 of Article 7 of the US Model - Definition of ‘business profits’
10.5.2 Variations of Para 7 of Article 7 - US Model
10.5.3 Para 8 of Article 7 of the US Model - Income after cessation of Permanent Establishment
10.5.4 Implications of the principles of the domestic law dealing with accrual of income
10.5.5 Taxation of income accruing after cessation of Permanent Establishment
10.5.6 Taxation of passive income accruing after cessation of Permanent Establishment
10.5.7 Extension of scope of Para 8 of Article 7
10.5.8 Transfer of asset from the Permanent Establishment to the head office
10.5.9 Attribution of expenses
10.5.10 Variations of Para 8 of Article 7 - US Model
10.5.11 Other provisions found in Article 7
Appendix A
CHAPTER 11: PARA 2 OF ARTICLE 3
11.1 MEANING OF “LAW”
11.2 WHAT IS LAW CONCERNING TAXES IN INDIA
11.2.1 Definitions adopted from other laws
11.2.2 Definitions of the General Clauses Act
11.2.3 General meaning given to certain words on the basis of other statutes
11.2.4 Implications of Court Rulings
11.2.5 Provisions of DTAAs
11.3 AMENDMENT TO MODEL CONVENTION AND OECD COMMENTARY
11.4 STATIC V. AMBULATORY APPROACH
11.4.1 Static Approach
11.4.2 Ambulatory Approach
11.5 IMPLICATIONS OF INADEQUATE DEFINITION IN ARTICLE 3
CHAPTER 12: APPROACHES FOR ASCERTAINING INCOME UNDER THE INCOME
TAX ACT
12.1 STATUTORY PROVISIONS FACILITATING COMPUTATION OF BUSINESS INCOME
12.1.1 Provisions of the Income Tax Act, 1961
12.1.2 Provisions of the Companies Act, 1956
12.2 UNDER WHAT CIRCUMSTANCES CAN RULE 10 BE INVOKED?
12.3 METHODS OF ATTRIBUTION PRESCRIBED BY RULE 10
12.3.1 Presumptive method
12.3.2 Proportionate method
12.3.3 Discretionary method
12.4 WHICH OF THE THREE METHODS SHOULD BE FOLLOWED?
12.5 DIFFICULTIES IN CALCULATING WORLD INCOME AS PER THE PROVISIONS OF THE ITA
12.5.1 Certain types of income/expenses not contemplated by the provisions of ITA
12.5.2 Can certain business transactions not connected with the part of the business carried on in India be ignored in Proportionate method?
12.5.3 Accounts maintained in other languages
12.6 APPLICABILITY OF RULE 10 TO INTEREST INCOME
12.7 METHODS OF COMPUTATION OF BUSINESS INCOME UNDER THE ITA
12.7.1 Computation method
12.7.2 Presumptive method
12.7.3 Proportionate method
12.7.4 Preferred method for non-resident taxpayers under the ITA
Appendix A
CHAPTER 13: PROFITS ATTRIBUTABLE TO BUSINESS OPERATIONS IN INDIA
13.1 PROFITS ATTRIBUTABLE TO BUSINESS OPERATIONS
13.1.1 Where all the operations of the business are carried out in a foreign country
13.1.2 Where all the operations are carried out in India
13.1.3 Where some operations are carried out in India and some outside India
13.2 WHAT TYPES OF BUSINESS OPERATIONS ATTRACT PROFIT ATTRIBUTION?
13.3 WHAT ARE PROFITS REASONABLY ATTRIBUTABLE TO OPERATIONS?
13.4 ARM’S LENGTH CONSIDERATION AND PROFITS ATTRIBUTABLE
13.4.1 CBDT Circular No. 23
13.4.2 Circular No. 4 of 1958
13.5 JUDGMENTS NOT CONSIDERING ADEQUACY OR OTHERWISE OF THE PAYMENTS TO INDIAN AGENTS
13.6 IS CIRCULAR 23 STILL VALID?
13.7 TAXATION OF BPO UNITS
13.7.1 Circular no. 1 of 2004
13.7.2 Circular no. 5 of 2004
13.7.3 Recent AAR ruling in the case of Morgan Stanley
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix H
Appendix I
CHAPTER 14: METHODS OF PROFITS ATTRIBUTION
14.1 PROFITS ATTRIBUTION - A GUESSWORK
14.2 DO THE COURTS INTERFERE WITH THE PROFITS ATTRIBUTED BY THE TAX AUTHORITIES
14.3 METHODS OF PROFIT ATTRIBUTION
14.3.1 Method 1 - Resources deployed as a basis of attribution (basic)
14.3.2 Method 2 - Salaries paid / costs incurred as basis of profits attribution
14.3.3 Method 3 - Outsourcing cost as a method of profits attribution
14.3.4 Method 4 - DTAA Method
Appendix A
CHAPTER 15: HEAD OFFICE EXPENSES
15.1 DEDUCTION FOR HEAD OFFICE EXPENSES UNDER ITA
15.1.1 Applicability in case there is no branch office in India
15.1.2 Applicability to expenses incurred by other overseas branches
15.1.3 Executive and general administration expenditure
15.1.4 Allowance for expenditure when the non-resident carries on business only in India
15.1.5 Expenditure specifically incurred for Indian branches
15.1.6 Does section 44C abet the difficulties faced by the assessing officers?
15.1.7 Head office expenses and Rule 10
15.1.8 Is it necessary to debit head office expenses to the P & L account of the Indian branch?
15.1.9 Is it necessary to remit funds to head office?
15.1.10 Head Office expenses and deduction of tax at source
15.2 DEDUCTION FOR HEAD OFFICE EXPENSES AND PROVISIONS OF DTAA
15.2.1 Does para 3 give special treatment to head office expenses?
15.2.2 Head office expenses and non-discrimination
Appendix A
Appendix B
CHAPTER 16: EFFECTIVELY CONNECTED - PERMANENT ESTABLISHMENT AND DIVIDEND, INTEREST, ROYALTIES, FEES FOR TECHNICAL SERVICES, OTHER INCOME
16.1 RATIONALE FOR LINKING THE ARTICLES
16.2 DOES ARTICLE 7 RESULT IN HIGHER TAX LIABILITY?
16.3 ARTICLES DEALING WITH ‘EFFECTIVELY CONNECTED’
16.4 MEANING OF ‘EFFECTIVELY CONNECTED WITH’
16.5 GUIDANCE FROM DTAAS SIGNED BY COUNTRIES
16.6 IMPLICATIONS OF DIFFERENCE BETWEEN ‘EFFECTIVELY CONNECTED WITH’ AND ‘ATTRIBUTABLE TO’
16.7 IMPLICATIONS OF THE WORDS ‘ATTRIBUTABLE TO’ IN THE US MODEL
16.8 ‘BUSINESS PROFITS’
16.9 INTERPLAY BETWEEN ‘FORCE OF ATTRACTION RULE’ AND ‘EFFECTIVELY CONNECTED TO’
16.10 SPECIAL FEATURE OF UN MODEL
16.11 VARIATIONS OF SCOPE OF ‘EFFECTIVELY CONNECTED’ IN THE UN MODEL
16.12 TAXATION OF ROYALTY AND FEES FOR TECHNICAL SERVICES INCOME AS PER THE DOMESTIC LAW
16.12.1 Specific provisions of ITA dealing with Royalties / FTS - upto March 31, 2003
16.12.2 Specific provisions of ITA dealing with Royalties / FTS - after March 31, 2003
16.12.3 Taxability of Royalties or FTS for services rendered outside India
16.13 SECTION 115A
Appendix A
Appendix B
CHAPTER 17: PERMANENT ESTABLISHMENT AND IMMOVABLE PROPERTY
17.1 HOUSE PROPERTY INCOME V. BUSINESS INCOME
17.2 WHETHER A LET OUT PROPERTY RESULTS IN PERMANENT ESTABLISHMENT
17.3 ARTICLE 7 V. ARTICLE 6
17.3.1 Letting out premises as main activity
17.3.2 Letting out as incidental activity
17.4 SALE OF IMMOVABLE PROPERTY
17.4.1 Immovable property as depreciable assets
17.4.2 Immovable property as stock in trade
17.4.3 Article 6(1) / (3) v. Article 13(1)
17.5 FORMS OF PERMANENT ESTABLISHMENT AND IMMOVABLE PROPERTY
17.5.1 Service PE & income from immovable property
17.5.2 Agency PE and income from immovable property
CHAPTER 18: PERMANENT ESTABLISHMENT AND CAPITAL GAINS
18.1 CAPITAL GAINS ON ALIENATION OF IMMOVABLE PROPERTY
18.2 CAPITAL GAINS ON ALIENATION OF MOVABLE PROPERTY
18.2.1 ‘Movable property’ v. ‘Capital assets’
18.2.2 Alienation v. Transfer
18.2.3 Movable business property
18.3 GAINS FROM ALIENATION OF PERMANENT ESTABLISHMENT
18.4 CAPITAL GAINS AND OTHER FORMS OF PERMANENT ESTABLISHMENT
Appendix A
CHAPTER 19: PERMANENT ESTABLISHMENT AND NON-DISCRIMINATION
19.1 CAN A PERMANENT ESTABLISHMENT TAKE BENEFIT OF PARA 1 OF ARTICLE 24?
19.2 BENEFIT OF PARA 1 TO A COMPANY NOT HAVING A PERMANENT ESTABLISHMENT
19.3 DOES ITA DISCRIMINATE ON THE BASIS OF NATIONALITY?
19.4 TAXATION OF FOREIGN COMPANIES AT A HIGHER RATE
19.4.1 Societe General Bank (AAR)
19.4.2 ABN Amro Bank NV v. JCIT (ITA No. 692/Cal/2000) Calcutta ITAT
19.4.3 Specific provisions allowing tax rate discrimination
19.4.4 Commentaries on DTAA
19.5 LEGISLATIVE AMENDMENTS TO CONTINUE TAX RATE DISCRIMINATION
19.5.1 Does Explanation override Para 2 of Article 24?
19.5.2 Explanation does not try to plug para 1 of Article 24
19.5.3 Validity of the amendment to section 90
19.5.4 Validity of the amendment to section 90
19.6 INTERPLAY BETWEEN ARTICLE 7(3) AND ARTICLE 24(3)
19.7 INTERPLAY BETWEEN ARTICLE 7(4) AND ARTICLE 24(3)
19.8 INSTANCES OF DISCRIMINATION UNDER THE ITA
19.8.1 Rate of tax
19.8.2 Disallowance under section 44C
19.8.3 Provisions of section 44D/115A
19.8.4 Presumptive taxation and discrimination
19.8.5 Deduction of tax at source
CHAPTER 20: SERVICE PE
20.1 DEFINITION OF SERVICE PE
20.2 RATIONALE OF SERVICE PE CLAUSE
20.3 “OTHER PERSONNEL”
20.3.1 Other personnel – whether it includes non-individuals?
20.3.2 Use of the term ‘personnel’ in the domestic law
20.3.3 Dictionary meaning of the term ‘personnel’
20.3.4 Use of the term ‘personnel’ in tax treaties
20.3.5 Use of the term ‘personnel’ in the Commentary
20.3.6 Other personnel – whether it includes employees of a non-individual
contractor?
20.3.7 Should the ‘personnel’ not be resident of the host country?
20.4 BENEFIT OF EXCEPTION CONTAINED IN ARTICLE 5(7)
20.4.1 Effect of deeming fiction
20.4.2 Rendering services v. carrying on business
20.4.3 Can an independent agent render services on behalf of an enterprise?
20.4.4 Domestic law meaning of the term ‘agent’
20.4.5 Conclusion
20.5 SHOULD ‘OTHER PERSONNEL’ BE DEPENDENT ON THE ENTERPRISE?
20.6 OVERLAP BETWEEN SERVICE PE AND AGENCY PE?
20.7 BENEFIT OF EXCEPTIONS CONTAINED IN ARTICLE 5(4)
20.8 MEANING OF ‘FURNISHING SERVICES WITHIN’
20.8.1 Difference between ‘Services rendered within a country’ and ‘services rendered in a country’
20.8.2 Presence of person availing services
20.8.3 Absence of person availing services in the country - Direct utilization / consumption of services
20.8.4 Absence of person availing services in the country - Indirect utilization of services
20.8.5 Utilization of services in another country
20.8.6 Provision of services to the head office
20.9 SIX MONTHS WITHIN ANY TWELVE MONTHS PERIOD
20.9.1 Month as a calendar month
20.9.2 Month as a period of thirty days
20.9.3 ‘Month’ as per the domestic law
20.9.4 Should the term ‘month’ be interpreted differently for twelve months calculation?
20.9.5 Should the services be rendered for a continuous period of six months?
20.9.6 Man days v. Solar days
20.9.7 Treatment of temporary gaps
20.10 SAME OR CONNECTED PROJECT
20.11 SERVICE PE AND REQUIREMENTS OF ARTICLE 5(1)
20.12 PROVISION OF SERVICES V. LENDING / DEPUTATION OF EMPLOYEES
20.13 ONE DAY PE
20.14 SERVICE PE V. ‘FEES FOR TECHNICAL SERVICES’
20.14.1 Exclusion in Service PE clause
20.14.2 Implications of non-exclusion
20.14.3 Interplay between Service PE and Article 13(5)
20.14.4 Restricted article for ‘Technical fees’
20.15 SERVICE PE IN TERMS OF THE PROVISIONS OF THE DOMESTIC LAW
20.16 VARIATIONS OF SERVICE PE CLAUSE
20.16.1 DTAAs signed by India
20.16.2 DTAAs signed by UK
20.16.3 DTAAs signed by USA
20.16.4 DTAAs signed by Netherlands
20.16.5 DTAAs signed by France
20.16.6 DTAAs signed by China
Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
CHAPTER 21: PERMANENT ESTABLISHMENT AND RETURN FILING
REQUIREMENT
21.1 RETURN FILING REQUIREMENTS UNDER SECTION 139
21.2 EXEMPTION UNDER SECTION 115A(5)
21.3 SECTION 139(1) V. SECTION 115A(5)
21.4 DEDUCTION OF TAX AT DTAA RATES AND RETURN FILING REQUIREMENTS
21.5 REQUIREMENT OF RETURN FILING WHEN ENTIRE INCOME EXEMPT UNDER DTAA
21.6 TWO ENTITY APPROACH AND RETURN FILING REQUIREMENT
21.7 CONCLUSION
Appendix A
CHAPTER 22: TAXATION OF A LIAISON OFFICE AS PERMANENT
ESTABLISHMENT
22.1 FORMS OF PRESENCE OF FOREIGN COMPANIES IN INDIA
22.1.1 Branch Office
22.1.2 Project Office
22.1.3 Liaison Office
22.2 MEANING OF BUSINESS ACTIVITY
22.2.1 'Business' under The Companies Act, 1956
22.2.2 'Business' under the Bombay Shops and Establishment Act, 1948
22.2.3 'Business' under the Foreign Exchange Management Act, 1999
22.2.4 'Business' under the Income Tax Act, 1961
22.3 ARE FOREIGN COMPANIES HAVING LIAISON OFFICES REQUIRED TO FILE RETURN OF
INCOME IN INDIA?
22.4 TAX LIABILITY OF FOREIGN COMPANIES HAVING LIAISON OFFICE IN INDIA
22.4.1 Tax liability under the ITA
22.4.2 Tax liability under the DTAA
22.5 PREPARATORY OR AUXILIARY ACTIVITIES
Appendix A
CHAPTER 23: SCOPE OF OPTION UNDER SECTION 90(2)
23.1 EXAMPLE 1
23.2 EXAMPLE 2
23.3 EXAMPLE 3
23.4 EXAMPLE 4
23.5 EXAMPLE 5
CHAPTER 24: SUMMARY OF OECD DISCUSSION DRAFTS
24.1 APPLICABILITY OF OECD WORK TO THE UN MODEL
24.2 ‘ENTERPRISE’ OR ‘ENTERPRISE AS A WHOLE’ TO MEAN JURIDICAL ENTITY
24.3 SUMMARY OF THE DISCUSSION DRAFTS
Part A
Part B
Part C
Part D
INDEX
Note: Product cover images may vary from those shown
3 of 5

Loading
LOADING...

4 of 5
Radhakishan Rawal, of PwC, India, is a Manager in the Tax & Regulatory Services team and is has more than 8 years experience in domestic and international taxation. He is a commerce Graduate and has been a member of the Institute of Chartered Accountants of India since 1997. He is also a member of the Institute of Company Secretaries of India and the Institute of Cost and Works Accountants of India and a Certified Treasury Manager.
Note: Product cover images may vary from those shown
5 of 5
Note: Product cover images may vary from those shown
Adroll
adroll