India: Permanent establishment of U.S. company | KPMG | GLOBAL

India: Permanent establishment of U.S. company; payments made to non-resident

India: Permanent establishment of U.S. company

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


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  • Indian company is “dependent agent” permanent establishment (PE) of U.S. company: The Mumbai Bench of the Income-tax Appellate Tribunal held that the Indian company of a foreign company group habitually exercised authority in India to conclude binding contracts on behalf of the foreign company. Therefore, the Indian company was a dependent agent PE in India under provisions of the India-United States income tax treaty. The case is: NGC Network Asia LLC. Read a December 2015 report [PDF 404 KB] 
  • Amended rules on furnishing of information, payments made to a non-resident: India’s Central Board of Direct Taxes issued guidance amending he rules about furnishing of information in respect of payments made to a non-resident. Read a December 2015 report [PDF 376 KB]
  • Investment in tax-free bonds, from common pool: The Bombay High Court addressed the rules under section 14A of the Income-tax Act, 1961, when an investment in tax-free bonds has been made from a common pool of owned and borrowed funds. The case is: SBI DHFL Ltd. Read a December 2015 report [PDF 441 KB]
  • Penalty paid to U.S. government not subject to withholding tax provisions: The Authority for Advance Ruling (the AAR) issued a ruling providing that the taxpayer would not be required to withhold (deduct) tax at source under the provisions of the Income-tax Act, 1961 (the Act) with respect to a penalty paid to the U.S. government in relation to a violation of the U.S. Securities Exchange Act. The case is: Satyam Computer Services Ltd. Read a December 2015 report [PDF 419 KB]

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