International Taxation Course (DTAA) 2023

•  Introduction and Basic Concepts of Tax Treaty
• What is Tax Treaty and Various Tax Treaty Models
• Various Treaty Model – OECD, UN and US Model
• Objective of tax treaty
• Content and General Provision applicable to Tax Treaty
• Principle and Approach to Interpret tax treaty
• Tools to interpret tax treaty
• Purpose of Model Tax Commentaries
• Different views on Taxation of Two contracting States

• Article 2 – Taxes – Overview of Article 2 in Tax Treaties
• Relevance of Article 2 – New Taxes, Additional taxes and other aspects
• Article 2 (1) – Taxes covered under Treaties
• Article 2 (2) – Meaning of Taxes for OECD Model
• Article 2 (3) – Existing Taxes covered under Treaty
• Article 2 (4) – Additional Future Tax

• Article 4 – Overview of Concept of “Residence”
• Importance of Concept of Residence in Tax Treaties
• Structure of Article – Resident
• Article – 4(1) of OECD Model – Who is Resident ?
• Article 4 – Categories of Resident
• Sovereign Wealth funds – Residence and Exemption from Tax
• Who is a “Person” under Tax Treaty ?
• Concept of “Liable to tax therein”
• Taxation of Partnership Firms – Are they Liable to tax?
• Taxation of Charitable Trusts – Are they “Liable to tax” ?
• Article – Tie breaker Rule for an individual
• Permanent home – What constitutes Permanent Home to determine residence ?
• Centre of vital interest – Importance in Determination of Residence
• Habitual abode – When does it decided residence ?
• Nationality – When does it decide residence ?
• Mutual Agreement – Determination of Residence by Competent Authority
• Article – 4(3) of OECD Model – Tie breaker other than an Individual
• When would a Company can be taxed in two state ?
• Place of Effective Management Concept
•  

• Overview of Article 5 – Permanent Establishment
• When can a PE arise in Source State – Office, Site or an Agent ?
• How a Foreign Company can operate in Source State
• Importance of PE Concept
• Article 5 of the OECD Model – Clauses
• PE – Other Important Aspects
• Article 5(1) – When does a Fixed Place PE arise under DTAA ?
• Key Characteristics of Fixed Place PE
• Leased Immovable Property and PE
• Place of Business – Examples
• Article 5 (2) – Specific Places included in Fixed Place PE
• Article 5(3) – Building Site, Construction or Installaton Project
• Construction PE – When does it arise ?
• Key Characteristic of Construction PE
• Activities Resulting in Construction PE
• Installation PE – Activities Resulting in Installation PE
• 12 Month Test – Aspects , Computation and Anti Abuse Provision
• Construction PE – Connected Activities
• Case Study – Fiscally Transparent Partnership
• Article 5(4) – Specific Activities Exempted from Constituting a PE
• Criterion of Auxiliary or Preparatory
• Article 5(4)(a) – Facilities for Storage etc
• Article 5(4)(b) – Maintenance of a stock of goods or merchandise
• Article 5(4)(c) – Maintenance of goods – Processing
• Article 5(4)(d) – Purchasing Goods/ Merchandise for the Enterprise
• Article 5(4)(d) – Collecting Information for the Enterprise
• Places constituting preparatory work activities
• Article 5 (4.1) – Office constituting Closely related Co PE
• Article 5(5)- Dependent Agent
• Article 5(5) – Dependent Agent PE
• Dependent Agent PE – Key Characteristics
• Role of Agent in the Contract
• Key Characteristics of the dependent agent PE
• Case study – Conclusion of Contract
• Article 5 (6)- Independent Agent
• Article 5 (6)- Independent Agent not constituting a PE
• Key Criterion of an Independent Agent
• Article 5(7) – Subsidiary Permanent Establishment
• Case Study – Holding Subsidiary Relationship
• Article 5 (8) – Related Enterprise
•  

• Article 6 – Income From Immovable Property​ – Key aspect and income covered
• Article 6(1) – Right Of Source State To Tax Income From Immovable Property​
• Article 6(2) – Meaning Of Immovable Property​
• Article 6(3) – Nature Of Income Covered ​
• Article 6(4) – Immovable Property Of Enterprise ​
• Method of Computation Of Income In Source State​
• Case Studies (1-3) on Article 6 – Income From Letting And Subletting​

• Overview of Article 7 Business Profits
• Relevance of Article 7 – Business Profits
• Structure of Article 7 – Business Profits
• Article 7(1) – Taxing Rights of Contracting State
• Characteristics of Article 7(1)​
• PE Should be in Source State
• What is Taxable under Article 7
• Article 7(2) – Determination of Profits of a PE
• Characteristics of Article 7(2)​
• ​Basis of Allocating Profits
• How to Ascertain Profits of a PE
• Deduction of Expenses – Rules violating Treaty?
• Article 7(3) – Deduction and Expenses
• Adjustment By State of Residence or State of Source
• Article 7(4) – Income Dealt with in other Article of Treaty

• Article 8 – International Shipping And International Air Transport​
• Article – 8(1) – Exclusive Right of State of Residence To Tax Profits​
• Meaning Of “International Traffic” – Article 3(1)(e)​
• Article 8(1) – Alternative – Tax based on Place Of Effective Management​
• ​Specific Income which are Taxable Under Article 8​
• What is Inland Waterways Transport​ and its relevance for Article 8
• Permanent Establishment impact on Article 8​
• Article 8(2) – Profits From Pool, Joint Business Agreements and international operating agency​

• Article 9 – Associated Enterprises – Objective and Guidelines
• Article 9(1) – Adjustment to Taxable Profits between Associated Enterprises
• Examples of Direct or Indirect Participation
• Thin Capitalization and Application of Arm’s Length Principle
• Control and Application of Arm’s Length Principle
• Article 9(2) – Corresponding Adjustments
• Secondary Adjustment – Not covered under para 2

• Article 11 – Interest – Overview of Article 11
• Learning Aspects of Article 11 – Interest
• Interest taxation – Important Issues
• Article 11 (1) – Right of State of Residence to Tax Interest
• Case Study – 1 – Interest Taxed on Payment Basis
• Case Study 2 – Interest From Third State Person
• Case Study 3 – Interest Attributable to PE in Third State
• Deduction of interest based on Residence of Recipient of Interest
• Article 11 (2) – Right of Source State to Tax Interest
• Who is beneficial owner of interest ?
• Case study – Third State beneficial owner of interest
• Third Party Beneficial Ownership – Examples and Cases
• Disadvantage of Gross Taxation – Example – Banks
• Case Study – Gross WHT and impact on International Trade
• Interest Exemption – Other Contracting State is Recipient
• Interest Exemption – Contracting State is Payor
• Interest Exemption – Export Financing Agencies and Programmes
• Interest Exemption – Interest paid to financial institutions
• Interest Exemption – Credit Sales and interest on Delayed payment
• Interest Exemption – Tax Exempt Entities
• Article 11(3) – What is regarded as Interest ?
• Article 11(3) – Issues for Consideration
• Whether Premium/ Discount/ Profit on Instrument amount to Interest ?
• Penalty charges for Late Payment – Not Interest
• Article 11 (4) – Interest and PE in Source State
• PE Situation – Interest Borne by PE
• Article 11 (5) – When Shall Interest Arise in a Contracting State
• Case Study – 4 – Interest Borne by PE in other Contracting State
• Case Study – 5 – Interest Borne by PE in Third Contracting State
• Article 11 (6) – Excess Interest Payment to Related Party
• Case Study – 6 – Excess Interest Payment to Related Party
• Special relationship for disallowance of Excess Interest Payment to Related Party
• Computation of Excess Interest Payment to Related Party

• Article 12 – Taxation of Royalties​
• Key Learning Points to be learnt about taxation of Royalties
• Which Country has the Right to Tax Royalty Income ? ​
• Article 12 (1) – Right of the State of Residence to tax Royalty​
• Cases Study on Royalty Arising within a Contracting State – Article 12(1)​
• PE Situation – Royalty Attributable To Third State PE
• Beneficial Owner – Concept And Issues​
• Open Issues and important aspects of Article 12(1)​
• Article 12 (2) – Meaning of Royalties ​
• What is included within Royalties – Examples ?
• Some Issues In Article 12 Payments – Whether Royalties ? ​
• Article 12 (3) – Taxation of Royalties when a Permanent Establishment​ exists in Source State
• Key Questions to understand Application of Article 12(3)​
• Meaning of Effectively Connected ​
• Article 12 (4) –Excess Payment due to Special Relationship between Payor and Payee​

• Article 13 Capital Gains – Key Aspects and Meaning of Capital Assets ?
• Article 13(1) – Capital Gains Arising from Alienation of Immovable Property
• Meaning of Alienation of property for Capital Gains
• Meaning of “capital gains” ?
• Key issues in Article 13(1)
• Article 13(2) OECD Model Convention – Movable Property of PE Business
• Article 13(2) – Capital Gains on Sale Movable Property of PE
• Meaning of Movable Property ?
• “Tax on Gains from Sale of Capital Asset after cessation of PE “
• “Case Study – Transfer of Movable and Immovable Property “
• Article 13(3) – Capital Gains from Sale of Ships or Aircrafts operated in International Traffic
• Article 13(4) – Capital Gains Arising From Alienation of Shares of Real Estate Company
• Case Study 1 – Value from Immovable Property
• Case Study 2 – Less than 50% value from IP
• Case Study 3- Value from IP – Comprehensive
• Article 13(5) – Alienation of any Other Property
• Assets Whose Transfer Could Be Covered Under Residuary Clause
• Factors Not Considered To Be Relevant While Applying Article 13(5)
• Computation of Income in Source State

• Article 15 (1) – Income from Employment
• Key issues in Article 15
• Salaries, Wages & Other Similar Remuneration – Meaning
• Some Payments Covered Under Article 15 ?
• What is Place of Exercise of Employment
• Taxation of Bonus For past Services
• Article 15 (2) – Short Stay Exemption
• Meaning of certain terms used in Article 15(2)
• Article 15 (3) – Remuneration of Crews of Ships or Aircraft

• Overview of Article 16 – Directors Fees
• Meaning of director’s fees and other similar payments
• Case Study – Director in dual capacity

• Overview of Article 17 – Entertainers and Sportspersons
• Article – 17(1) – Right of Source State to Tax income
• What is covered under Article 17 ?
• What are Personal Activities of Athletes and Sportsperson ?
• What is covered under Article 17?
• Who is an Entertainer ?
• Who is a Sportsperson ?
• Taxation of Combined income ?
• Key Income taxable under Article 17(1) and Related issues
• Article 17(2) – Income Accrues to Another Person

• Article 23A & 23B – Methods for elimination of Double Taxation
• Applicability of Article 23
• Types of relief from Double Taxation
• Exemption Method – Article 23A(1) – Obligation of state of Residence
• Article 23A(2) – Dividend and Interest Income – Tax credit
• Article 23A(3) – Exemption with progression Method
• Article 23A(4) – Limitation on exemption of income
• Article 23B(1) – Credit Method – Credit for taxes paid in source state
• Tax Sparing
• Underlying Credit
• Article 23B(2) – Exempt income considered for tax rate

• Article 24 – Non – Discrimination under Tax Treaties
• Article 24(1) – Non Discrimination based on Nationality
• Article 24(2)- Non Discrimination in case of Stateless person
• Article 24(3)- Discrimination for taxation of Permanent Establishment
• Article 24(4)- Non Discrimination for deduction of expenses for Payor when payments to NR
• Article 24(5) – Non-Discrimination due to Foreign Ownership
• Non Applicability of Non Discrimination Provision – Article 26(5)
• Article 24(6) – Taxes covered under Non-Discrimination

• Article 25 – Mutual Agreement Procedure
• Mutual Agreement Procedure – Meaning
• Applicability of MAP on various article
• Article 25(1) – Applicability of MAP
• When can MAP be invoked by a Tax Payer ?
• Article 25(2) – Action of competent authority to whom MAP application has been filed
• Article 25(3) – Consultation by authorities on issues arising out of MAP
• Article 25(4)- Rules for consultation between authorities on issues arising out of MAP
• Article 25(5) – Can a tax payer invoke “Arbitration”. If issues are not decided under MAP ?

• Article 26 – Exchange of information
• Article 26(1) – Obligation to exchange information on Contracting States’
• Nature of requested information
• Article 26(2) – Use and secrecy of information obtained under Exchange of Information
• Article 26(3)- Limitation on obligation of requested state to provide information requested under Article 26
• Article 26(4) – Use of information by Requested State not necessary
• Article 26(5) – Request of information available with Banks etc under Article 26

• Scope of Article 27 – Assistance in Collection of Taxes​
• Article 27(1)- Contracting States​ – Obligations To Lend Assistance ​
• Article 27(2)- Meaning of Revenue Claim that can be enforced ​
• Article 27(3)- Request for Assistance​
• Article 27(4) – Measures Of Conservancy ​
• Article 27(5)- Priority Of Revenue Claim ​
• Article 27(6)- Proceeding Before Courts ​
• Article 27(7)- Revenue Claim Ceases To Exist​
• Article 27(8) – Limitation On Obligation

• Article 28 – Members of Diplomatic Missions and Consular Posts

• Article 29 – Entitlement of Tax Treaty Benefits
• Article 29(1) – Restriction to Tax Treaty Avail Benefits
• Article 29(2) – Qualified Persons eligible to avail Tax Benefits
• Article 29(3)- Treaty Benefits To Resident Engaged In Active Conduct Of Business
• Article 29(4)- Ownership By Person Entitled To Benefits
• Article 29(5)- Headquarters Company
• Article 29(6) – Discretionary Relief
• Article 29(7) – Definitions
• Article 29(8)- Permanent Establishment
• Article 29(9)- Underlying Principles

Article 30 – Territorial Extension

• Article 31 – Entry into Force
• Article 31(1)- Ratification
• Article 31(2) – Enter into Force
• Entry into force and date when convention shall take effect

Article 32 – Termination

• What is Global Minimum Tax​ ?
• Developments on GMT in international front
• Objectives of Global Minimum Tax and Scope Of Application​ of Global Minimum Tax
• Key Rules​ under the Global Minimum Tax
• Income Inclusion Rule – IIR ​of Global Minimum Tax
• Income Inclusion Rule – Top-Down Approach​
• Switch Over-Rule​ – Global Minimum Tax
• Under Taxed Payment Rule – Global Minimum Tax
• Income Inclusion Rule Vs Under Taxed Payment Rule
• Example On Global Minimum Tax​ and Assumptions
• Example 1 – UPE Has Implemented IIR
• Example 2 – UPE Has Not Implemented IIR​
• Example 3 – Comprehensive Example 1​
• Example 4 – Comprehensive Example 2​
• Example 5​ – Comprehensive Example 3
• Impact of GMT on Low-Tax ​Countries

• Introduction to International Law and Double Tax Treaty
• Jurisdiction of State to tax and types of jurisdiction
• Tax under International Law and concept of customary law
• Importance of Source and Residence Jurisdiction
• International Court of Justice (ICJ)-For settling disputes
• Overview of International Tax Regime
• OECD’s BEPS Project and Action Plan

• Important Concepts Of International Tax
• Direct Taxes- Tax on Income , Profit or Gain
• Types of Income and Tax Rates
• Indirect and Transaction Taxes
• Branch Profits, Losses, Income Determination & Group Tax
• Tax Incentives, Withholding Tax and Tax Sparing
• Double Tax Relief For Foreign Income
• Emerging concepts in taxation regime

• Salary Received by Indian Employee Working for US Co.
• Taxation & Importance of Salary by Employee
• Exemption of Salary of an Employee – Short Stay Exemption
• No. of Days for Short-Stay Exemption of foreign employee
• Stock Opt. to Foreign Employee-Vesting Period served outside
• Stock Opt. to Foreign Employee-Period Served in India

• Series 1 – Article 4 – Residence of DTAA
• Series 2 – Foreign Investment in India

• Salary Received by an Indian Employee Working in US Company
• Interest Received from a US Company by an Indian Individual
• Dividend Received from a US Company by an Indian Individual
• Consulting Fees Received from US Co. by an Indian Freelancer
• Consultancy Fees from a US Company by an Indian Individual