Foreign enterprises for the purpose of Indian Income Tax (IT) Act are enterprises that are incorporated outside India or that do not have their place of effective management in India (as per new section 6 of IT Act, effective from April 2017). Section 5(2) read with section 4 of the IT Act provides that the…

In quantum physics, nothing is certain, particles are not to be found at one point but within waves of probabilities and connected particles can mirror each other faster than the speed of light because there is no transfer of information. Agency PE’s threaten to become the quantum physics of taxation. Introduction But let us get…

In March, 2015, in wrote in this same pages: “The BEPS Project is subject to internal (inherent) risks (tight schedule, quality of outcomes, jurisdictional overlapping) as well as external risks (potential breach of the Nations’ compact behind a common goal due to competing interests, and misaligned, premature and unilateral actions by States) which might conspire…

Tax treaty negotiators in 100 countries will be tied up over the next few months with the challenge to evaluate their positions on the BEPS Multilateral Convention (BEPS Convention) with a view to participation in the signing ceremony scheduled for 7 June 2017 in Paris. The many options offered by the BEPS Convention make it…

On February 1, 2017, India’s Finance Minister, Arun Jaitley, presented the country’s 2017-18 Budget, which contains several tax proposals in the area of international tax law, including the introduction of a new provision to provide for transfer pricing secondary adjustments and new thin capitalization rules. The Budget also contains much-needed clarity on the tax treatment…

Publication of text of The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS Convention) by the OECD on 24 November 2016 is one of the key milestones in the OECD/G20 Project to tackle Base Erosion and Profit Shifting. The BEPS Convention will be open for signature from…

The Anti-Tax Avoidance Directive (ATAD) is the European answer to the phenomenon of BEPS: Base Erosion and Profit Shifting. Characteristically for tax avoidance by Base Erosion and Profit Shifting, is that it takes place within multinational groups (MNE’s). Therefore, the ATAD applies to these groups of companies. Nevertheless, the European Commission has chosen to also…

Volume 44 (2016), Issue 8/9 contains: EDITORIAL: Andreas OESTREICHER, ‘To See or Not to See: That Is Not the Question’ ARTICLES: Georg KOFLER, ‘Some Reflections on the ‘Saving Clause’’ Abstract: Action 6 of the Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting project deals with tax treaty abuse and proposes inter…

Tax practitioner’s in the northern hemisphere taking their summer holidays may well have included the OECD discussion draft of 5 July 2016 on the attribution of profits to permanent establishments as part of their holiday reading (a mere 40 pages). See post on July 21, 2016. Over 50 organisations and individuals submitted comments(published by the…

On May 10, 2016, the Indian Finance Ministry announced that a new protocol has been finalized to amend certain provisions of the Indo-Mauritius double taxation avoidance agreement. According to a press release issued by the Finance Ministry, the protocol is aimed at tackling the dual problem of treaty shopping and round tripping of funds, besides…

The attribution of profits to a permanent establishment is already a complex issue with at least three separate regimes in the tax treaty context- the OECD Authorised Approach under the 2010 OECD version of Article 7 of the OECD Model, the AOA subject to limitations required by the pre-2010 version and that permitted by Article…

1. The Tendency We live in a time where the media, politicians, NGOs and activists increasingly are preoccupied with international tax matters. A simultaneous preoccupation is observed among the OECD, G20, EU countries and most other developed countries alike. This has led to continuously increasing regulatory requirements and strengthened legislation towards companies. The tendency is…

In highly dramatic fashion the French tax authorities and IT specialists raided Google’s headquarters and McDonalds. I don’t own Google stock. I’m not in favor of Google’s near monopoly on search (though it has accomplished this by offering a really great product and (free) work tools that make my life much easier).  I don’t eat…

Model tax treaties do matter. The OECD and UN Models constitute precedent books with standard clauses that contracting states can follow or adapt to suit their particular circumstances. The US Model treaty, in contrast, is a statement of intent. The preamble to the revised 2016 US Model Income Tax Convention released by the US Treasury…