Rental of Aircraft in International Traffic: Dry Leasing and Permanent Establishment: Article 8(1) of the India-Ireland Tax Treaty

Aircraft leasing: treaty text treats rental income as taxable in the lessor's residence when aircraft form part of international traffic.

Whether leased aircraft create a fixed place Permanent Establishment depends on the disposal test: operational control and the right to use and conduct business from the place must vest in the enterprise; mere ownership and protective inspection or repossession rights do not suffice. Profit attribution to any alleged PE requires a FAR based arm's length analysis under Article 7(2), and Article 8(1)'s express inclusion of 'operation or rental' covers rental income from aircraft forming part of a fleet used in international traffic, allocating taxing rights to the State of residence.