Advertisement collection agent of foreign
broadcasting company does not create PE in India; arm's length remuneration to
agents extinguishes further attribution to PE
This News Alert on a recent decision of the Bombay High Court (HC), wherein the taxpayer’s advertisement collecting agents in India were held to not create a dependent agent permanent establishment (PE) under the Double Taxation Avoidance Agreement (tax treaty) between India and Mauritius. It was further held that where an Indian agent had been remunerated at an arm’s length price, nothing further was left to be taxed in the hands of the foreign enterprise. In adjudicating this matter, the HC relied upon the decision of Supreme Court in the case of Morgan Stanley & Co. and the Bombay HC in the case of SET Satellite (Singapore) Private Limited
This News Alert on a recent decision of the Bombay High Court (HC), wherein the taxpayer’s advertisement collecting agents in India were held to not create a dependent agent permanent establishment (PE) under the Double Taxation Avoidance Agreement (tax treaty) between India and Mauritius. It was further held that where an Indian agent had been remunerated at an arm’s length price, nothing further was left to be taxed in the hands of the foreign enterprise. In adjudicating this matter, the HC relied upon the decision of Supreme Court in the case of Morgan Stanley & Co. and the Bombay HC in the case of SET Satellite (Singapore) Private Limited
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