• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 6/14/2013

India - U.S. company’s profits, Singapore company’s payments not taxable 

June 14:  The KPMG member firm in India prepared reports on the following developments (read the June 2013 reports by clicking on the hyperlinks provided below):
  • U.S. company’s profits not taxable income of its Hong Kong subsidiary in India - The Mumbai Bench of the Income-tax Appellate Tribunal held that profits of a U.S. parent company in India are not attributable to its Hong Kong subsidiary and are to be excluded from the subsidiary’s taxable income in India.

    The case is: St. Jude Medical (Hongkong) Ltd. Read a June 2013 report [PDF 195 KB]

  • Payments for sponsorship rights not royalty under tax treaty with Singapore - The Delhi Bench of Income-tax Appellate Tribunal held that (1) payments made for sponsorship rights are not for the use of a trade mark or brand name under the India-Singapore income tax treaty and therefore not to be treaty as royalty income; (2) free service coupons provided to dealers for vehicle repairs are reimbursements and not subject to withholding; and (3) incentives/discounts offered to dealers on purchases of spare parts/vehicles were not commission and not subject to withholding.

    The case is: Hero MotoCorp Ltd. Read a June 2013 report [PDF 171 KB]

  • Time to realize, repatriate proceeds from exports of goods and services - The Reserve Bank of India issued guidance providing that units operating in special economic zones (SEZs), that previously were permitted to realize and repatriate to India the full value of goods or software without any time limit, must now realize and repatriate the full value of goods, software, and services to India within a period of 12 months measured from the date of export.

    Read a June 2013 report [PDF 371 KB]

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