Dependent Agent Permanent Establishment: habitual authority to conclude contracts must be proven; distributors as independent resellers defeated DAPE.

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Full Text of the Document

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....Dependent Agent Permanent Establishment under Article 5(4) was examined: the revenue must prove an agent in India habitually exercises authority to conclude contracts or meets alternative sub conditions; sample distributor agreements showed non exclusive distributors purchasing, selling and bearing risk in their own name, with only a limited lawful maximum resale price constraint. Certification of resellers was treated as quality control, not control converting distributors into dependent agents. Website descriptions did not establish customer specific tailoring. As conditions of Article 5(4) were not satisfied, no DAPE arose and attribution of profits to a PE was unwarranted.....