DOUBLE TAXATION AVOIDANCE AGREEMENT or DTAA MEANING DTAA Meaning – Tax treaties , which are also called Double Tax Avoidance Agreements, or DTAAs, are agreements between two or more sovereign countries. The intention behind such agreement is to avoid double taxation for various forms of income which may be derived by residents of there states … Read more
Treaty Definition – Article 2 of Vienna Convention on Law of Treaties, 1969 defines “Treaty” as – “Treaty” means an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation In other words, the … Read more
Double Taxation and Connecting Factors – Jurisdictional Double Taxation, Economic Double Taxation and Tax Neutrality – Capital Export Neutrality, Capital Import Neutrality, Nationality Neutrality Taxability of a foreign entity /taxpayer, in any country depends upon the : – a) Residence of Taxpayer – Generally, resident are taxable on their global income, while the non resident … Read more
Authority for Advance Rulings (AAR) CONCEPT OF ADVANCE RULING Sometimes, a person, who enters into a transaction, may not be sure relating to the amount of tax he may have to pay, on the income which he earns out of such transaction. In order to obtain certainty, regarding the tax treatment of such income, a … Read more
Article 12 – Royalty and Fees for Technical Services In this presentation we would learn about the taxation of Royalties and Fees for Technical Services, which in some cases is also known as Fee for Included services. The Model OECD clause Article 12, which deals with Royalty is as under : – ROYALTIES 1. Royalties … Read more
Concept of Permanent establishment (Permanent Establishment) under Article 5 of the OECD Model Convention Introduction and Permanent Establishment Meaning Article 5 of the OECD Model Convention deals with the concept of a Permanent Establishment (PE). The term Permanent Establishment is used to evaluate a Contracting State’s right to tax the earnings of the enterprise of … Read more
MISCELLANEOUS PROVISIONS FOR NON-RESIDENTS Under the provision of Section 139, following person are mandatorily required to file return of income : – Company or firm ; or A person other than a company [or a firm], if his total income or the total income of any other person in respect of which he is assessable under … Read more
Section 195 of Income Tax Act – Withholding tax on payment to Non Resident Applicability of withholding tax on payment of interest or any other sum to non-resident – section 195(1) Section 195 of Income Tax Act Any person (whether resident or non-resident), responsible for paying interest (other than interest referred to in Section 194LB/194LC/194LD) … Read more
Where the branch of a foreign company, which is engaged in banking business in India is converted into an Indian subsidiary of such foreign company ,any capital gains arising from such conversion would not be chargeable to tax , provided the conditions notified by the Central Govt. are satisfied and such conversion is in accordance … Read more
Applicability of MAT on Foreign Companies – Section 115JB of Income Tax Act 1961 Under the provision of the Income Tax Act, where the tax payable by the company as per the provision of the IT Act, is less than MAT, the company is liable to pay a minimum income tax equivalent to MAT. Tax … Read more