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Supreme Court ruling on non-applicability of Minimum Alternate Tax (MAT) provisions to foreign companies

Global Tax Update:November 2015/India

The Supreme Court of India in its judgement has held that MAT provisions will not apply to foreign companies not having permanent establishment (PE) or place of business in India.The government had earlier clarified vide the press releases that MAT provisions would not be applicable to FII/ FPIs and foreign companies that do not have a permanent establishment or a place of business in India. (Global Tax Update:November 2015/India)

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1. Supreme Court ruling on non-applicability of Minimum Alternate Tax (MAT) provisions to foreign companies

The Supreme Court of India in its judgement has held that MAT provisions will not apply to foreign companies not having permanent establishment (PE) or place of business in India.The government had earlier clarified vide the press releases that MAT provisions would not be applicable to FII/ FPIs and foreign companies that do not have a permanent establishment or a place of business in India.

2. CBDT notifies rules for application of range and multiple year data for transfer pricing

The CBDT issued a notification on 19 October 2015 providing a three step process for comparability analysis and determination of arm’s length price (ALP) under the Indian transfer pricing regulations.

3. Karnataka High Court ruling on whether purchase activities of LO would constitute business connection or permanent establishment in India

As per the High Court, where the activities of liaison office (LO) in India are limited to purchase of goods in India for the purpose of export, neither does it gives rise to any business connection in India under the provisions of the Income-tax Act, 1961 nor does it create a permanent establishment (PE) in India under the tax treaty and therefore, no income can be attributed to such activities that is taxable in India.


>> Click for Japanese [最高裁判所判決:最低代替税制度は外国法人には適用されず ほか]

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