India: Fixed place PE; going concern vs. slump sale | KPMG | GLOBAL

India: Fixed place PE; going concern vs. slump sale

India: Fixed place PE; going concern vs. slump sale

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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  • Race car circuit constitutes “fixed place PE” under the India-United Kingdom income tax treaty: The Supreme Court of India held that an international circuit constitutes fixed place of business under the India-UK income tax treaty, since the circuit was under the control and at the disposal of the taxpayer. The case is: Formula One World Championship Ltd. Read an April 2017 report [PDF 441 KB]

  • Sale of business on “going concern” basis is “slump sale” and not a sale of depreciable asset: The Supreme Court of India, in a case that arose prior to the introduction of slump sale provisions, held that sale of an entire running business on a “going concern” basis is a slump sale under section 50(2) of the Income-tax Act. The case is: Equinox Solution Pvt. Ltd. Read an April 2017 report [PDF 371 KB]

  • 40% profit attributed to Indian operations of taxpayer: The Bengaluru Bench of Income-tax Appellate Tribunal held that a liaison office of a multinational company conducting activities that are not “preparatory and auxiliary” constitutes a permanent establishment. The case is: Arrow Electronic India Ltd. Read an April 2017 report [PDF 420 KB]

  • 8.65% interest rate on employees’ provident funds scheme: The government of India has declared a rate of interest of 8.65% for interest on provident fund accumulations for members of employee provident funds schemes for the financial year 2016-2017. Read an April 2017 report [PDF 311 KB]

  • No income tax on salary: The Ahmedabad Bench of the Income-tax Appellate Tribunal held that only the actual salary received by the individual taxpayer following a “deduction of notice” pay by the employer is taxable. The case is: Nandinho Rebello. Read an April 2017 report [PDF 590 KB]

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