Article

Public consultation paper on proposal for attribution of profits to permanent establishment

Global Tax Update : May 2019 / India

Historically, there has been lack of certainty and clarity regarding the methodology followed by Indian tax authorities for attribution of profits to a Permanent Establishment (“PE”) of a non-resident in India. Recognizing this, the Central Board of Direct Taxes (“CBDT”) formed a Committee with the following mandate:

  • Examine existing scheme of profit attribution to PE under Article 7 of Double Taxation Avoidance Agreements (“DTAAs”);
  • Examine contribution of demand side and supply side factors in profit attribution; and
  • Recommend changes needed to IT Rules to provide specific rules on how profits are to be attributed to a non-resident person having PE in India.

The Committee has submitted a comprehensive report titled ‘Proposal for Amendment of Rules for Profit Attribution to Permanent Establishment’, which the CBDT has made available for stakeholder comments on 18 April 2019.

 

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>> Click for Japanese [恒久的施設への利益の帰属に関する改正案の諮問書]

(112KB, PDF)

* This Article is based on the relevant Japanese or specific country’s tax law and other authorities in effect on the date of this Article. This Article would not be guaranteed updating if there are any changes in Japanese tax law, any other law, or interpretations by the courts or tax authorities thereof after the date of this Article.

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