Rahul K Mitra, PwC, Ajay Kumar, PwC, Ralph Cunningham ITR
The attribution of profits to permanent establishments (PEs) is gaining complexity in India, with the Indian tax authorities often taking diverse and aggressive stand on attribution approach. This has resulted in significant tax litigation in India culminating in varied judicial precedents.
Though India has a comprehensive tax treaty network and transfer pricing regulations based on OECD framework, unfortunately the close connection between PE attribution and transfer pricing has not been clarified in judicial rulings in the past, up until very recently when a Tax Tribunal emphasised the need to have a transfer pricing analysis for profit attribution purpose. At the same time, due to lack of concrete administrative or procedural guidance, India’s tax authorities are reluctant or hesitant to consider PE attribution issues based on transfer pricing fundamentals. This results in significant tax risks for taxpayers on account of PE exposure in India.
In this webcast, experts from PwC will discuss some of the recent judicial rulings in India on this issue and best practice approaches that can be adopted by taxpayers to deal with the issue of attribution of profits to PEs.
PwC Speakers: Rahul K Mitra (Executive Director and National Leader - Transfer Pricing) and Ajay Kumar (Executive Director and National Leader - Tax Markets)
International Tax Review: Ralph Cunningham