• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/11/2013

India - Taxing amounts under Thailand treaty; service tax exemption 

July 11:  The KPMG member firm in India prepared reports on the following developments (read the July 2013 reports by clicking on the hyperlinks provided below):
  • No “fees for technical services” clause; payment not connected to a PE; thus, not taxable under miscellaneous income article of treaty - The Madras High Court found that payments made for services rendered for the transfer of know-how were royalties under Article 12 of the India-Thailand income tax treaty; and that payments made for services providing technical advice and assistance were covered under Article 7 (business profits) of the tax treaty. The court further held that because there was no permanent establishment (PE) in India, the “fees for technical services” were not subject to tax under Article 7 of the tax treaty, and because the payments did not fall under the category of “miscellaneous income” were not taxable under residuary article of the tax treaty.

    The case is: Bangkok Glass Industry Co. Ltd. Read a July 2013 report [PDF 195 KB]

  • Revised special economic zones (SEZ) exemption under service tax - India’s Central Government issued SEZ-related guidance providing an “up-front” service tax exemption on specified services received by a SEZ unit and SEZ developer that are “used exclusively for the authorised operations.” A prior condition of “wholly consumed” has been removed.

    Read a July 2013 report [PDF 190 KB]

  • Securities and Exchange Board of India decisions - Decisions of the Board on 26 June 2013 conern: (1) SME listing on institutional trading platform without IPO; (2) proposed amendments to buy-back of securities regulations; preferential issue; foreign institutional investors, sub accounts and qualified foreign investors to be classified as “foreign portfolio investors.”

    Read a July 2013 report [PDF 194 KB]

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