Indian Tribunal Rules on Creation of Service PE

India's Bangalore Income Tax Appellate Tribunal ruled that fees for rendering managerial and consultancy services to an Indian company were royalty income under both the Indian tax laws and the India-UAE income tax treaty. Accordingly, the fees were subject to India's withholding tax. Notw...

Full description

Saved in:
Bibliographic Details
Published in:Journal of International Taxation 2017-10, Vol.28 (10), p.7-8
Main Authors: Joseph, Riad, Uchil, Sameep, Finnerty, Chris, Parsch, Kazuyo, Yap, Bee-Khun, Martin, Trang, Kapadia, Sudhir
Format: Article
Language:English
Subjects:
Employees
Fees & charges
Income taxes
International taxation
Knowledge
Permanent establishment
Tax legislation
Tax treaties
Tribunals & commissions
Withholding taxes
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:India's Bangalore Income Tax Appellate Tribunal ruled that fees for rendering managerial and consultancy services to an Indian company were royalty income under both the Indian tax laws and the India-UAE income tax treaty. Accordingly, the fees were subject to India's withholding tax. Notwithstanding its decision that the fees constituted royalty income, the Tribunal held that if the income could not be treated as royalty income, Taxpayer was nevertheless subject to India's corporate tax since Taxpayer created a service permanent establishment in India, resulting in the generation of fees for technical services pursuant to the treaty that was taxable in India. Characterization of income as royalty. The Tribunal ruled that Taxpayer did not render any services to company but merely provided access to or shared its specialized knowledge, skill, and expertise.
ISSN:1049-6378