Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 7/16/2012

India - Payments under tax treaties with Germany, Singapore, Netherlands 

July 16:  The KPMG member firm in India has prepared reports on the following developments (read the July 2012 reports by clicking on the hyperlinks provided below):

  • Payments received for ISO certification and audit services are not “fees for technical services” under India-Germany income tax treaty: The Mumbai Bench of the Income-tax Appellate Tribunal held that payments received for ISO* certification and audit services are not “fees for technical services” under the Income-tax Act, 1961, or under Article 12 of the India-Germany income tax treaty. In light of the services rendered, the tribunal found that the taxpayer had not been providing technical, managerial, or consultancy services.

    *ISO = International Organization for Standardization

    The case is: TUV Management Service Gmbh. Read a July 2012 report [PDF 210 KB]


  • Income is not taxed under the “residuary” provision of India-Singapore income tax treaty when such items of income are covered under a separate provision of the tax treaty: The Kolkata Bench of the Income-tax Appellate Tribunal held that consultancy services that do not involve a transfer of technology are not taxable as fees for technical services under Article 12 or as residuary income under Article 23 of the India-Singapore tax treaty.

    The case is: Andaman Sea Food Pvt. Ltd. Read a July 2012 report [PDF 202 KB]


  • Payments made by an Indian subsidiary to a Dutch parent company under a dredging contract are not as a “reimbursement” but are taxable as “fees for technical services” under the India-Netherlands income tax treaty: The Chennai Bench of the Income-tax Appellate Tribunal held that expense reimbursements made by an Indian subsidiary to a Dutch parent company under a dredging contract are taxable as “fees for technical services” under the India-Netherlands income tax treaty. The payment could not be regarded as a “reimbursement” because the facilities arranged and coordinated by the taxpayer to support the operations of its Indian subsidiary were activities that require adequate technical know-how.

    The case is: Van Oord ACZ Marine Contractors BV. Read a July 2012 report [PDF 207 KB]


  • Deduction can be claimed before the appellate authorities even if not claimed on the tax return: The Bombay High Court held that the taxpayer is entitled to claim a deduction in a case pending before the appellate authorities even if the deduction was not claimed in the original or amended income tax return, provided that the deduction was claimed during the assessment and appellate proceedings.

    The case is: Pruthvi Brokers & Shareholders Pvt. Ltd. Read a July 2012 report [PDF 199 KB]


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1801 K Street NW
Washington, DC 20006.
 

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