Tax rate applicable to foreign companies - Non-Discrimination Article under DTAA.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion regarding The Board has had the occasion to examine this question of the rate of tax applicable to foreign companies doing business through a permanent establishment in India. The article on "Non-Discrimination" in the Double Taxation Avoidance Agreements between India and various countries normally contains the following sentence:- "The taxation on a permanent establishment which an ent....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ome liable to tax in India makes prescribed arrangements for declaration and payment of dividends within India. A foreign company by definition (under section 2(23A) of Income-tax Act, 1961), is the one which is not a domestic company i.e. which has not made prescribed arrangements for declaration and payment of dividends in India. As against this, under section 6(3) of the Income-tax Act, 1961, a....