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India: Tax residency certificate, permanent establishment (income tax treaty issues)

India: Tax residency certificate, PE

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).


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  • India-United States income tax treaty benefits apply without tax residency certificate: The Ahmedabad Bench of the Income-tax Appellate Tribunal held that the taxpayer cannot be denied benefits under the India-United States income tax treaty because it has not furnished a tax residency. However, the taxpayer must satisfy eligibility for the tax treaty benefit, and it is the responsibility of the taxpayer to give sufficient and reasonable evidence in support of residential status so as to satisfy the conditions under Article 4(1) of the tax treaty. The case is: Skaps Industries India Pvt Ltd. Read a June 2018 report [PDF 735 KB]
  • Indian subsidiary not permanent establishment under India-Saudi Arabia income tax treaty: The Authority for Advance Rulings (AAR) found that the Indian subsidiary did not constitute a fixed place permanent establishment (PE) in India under Article 5(1) of the India-Saudi Arabia income tax treaty because the taxpayer (applicant) was not carrying on its main business from the premises of its subsidiary and the fixed place was not available to the foreign company at its disposal. The foreign company’s services were in the nature of support services. Further, the AAR found that the activities of the Indian subsidiary were duly compensated on an arm’s length basis in accordance with the transfer pricing regulations. The case is: Saudi Arabian Oil Company. Read a June 2018 report [PDF 667 KB]

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