Permanent establishment profit attribution clarified: taxation limited to remuneration attributable to local activities, not total contract value. The Protocol specifies treaty rules on profit and withholding taxation: profits of a permanent establishment are taxable only to the extent attributable to the permanent establishment's actual local activities rather than the enterprise's total receipts; for contracts, only the portion performed by the permanent establishment is taxable there while head office profits remain taxable in the resident State. It excludes attribution for mere facilitation of foreign trade agreements, requires minimum deductions for executive and administrative expenses no less than those under the Indian Income tax Act as of signature, sets a three year refund claim period for excess source tax, and provides that later reduced treaty withholding rates granted to OECD member States will apply to this Convention from their entry into force. Royalties and related payments arising in France paid to Indian residents are not taxable in France.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Permanent establishment profit attribution clarified: taxation limited to remuneration attributable to local activities, not total contract value.
The Protocol specifies treaty rules on profit and withholding taxation: profits of a permanent establishment are taxable only to the extent attributable to the permanent establishment's actual local activities rather than the enterprise's total receipts; for contracts, only the portion performed by the permanent establishment is taxable there while head office profits remain taxable in the resident State. It excludes attribution for mere facilitation of foreign trade agreements, requires minimum deductions for executive and administrative expenses no less than those under the Indian Income tax Act as of signature, sets a three year refund claim period for excess source tax, and provides that later reduced treaty withholding rates granted to OECD member States will apply to this Convention from their entry into force. Royalties and related payments arising in France paid to Indian residents are not taxable in France.
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