India: Project office not PE under UAE treaty | KPMG | GLOBAL

India: Project office not permanent establishment under UAE treaty

India: Project office not PE under UAE treaty

The Delhi High Court held that activities of the taxpayer’s project office came under the exclusionary clause of Article 5(3)(e) of the India-UAE income tax treaty (tax treaty). Accordingly, the project office did not constitute a permanent establishment (PE) under these tax treaty provisions.


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As noted by the court, given that the duration of the project activities in India was less than nine months, the taxpayer did not have an “installation PE” in India under Article 5(2)(h) of the income tax treaty with the UAE. 

Further, a consultant appointed by the taxpayer was found to be an agent having “independent status” and, therefore, did not constitute a “dependent agent PE” of the taxpayer in India. Accordingly, no income could be attributed to the taxpayer in India. 

The case is: National Petroleum Construction Co. Read a February 2016 report prepared by the KPMG member firm in India: Project office for installation of petroleum platforms and submarine pipelines does not constitute a PE in India

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