AAR holds payment by Streia (India) Ltd. (applicant) to Groupe Steria, France for management services taxable as Fees for Technical Services (‘FTS’) under. THE AYOIDANCE OF DOUBLE TAXATION – AN EVALUATION. Mahesh C. Bijawat*. THE RECENT AGREEMENT between India and France for the avoidance of. Get comprehensive agreements & Tax information exchange agreement between different countries & India to know how Non-resident can claim tax benefits.

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If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other Contracting State but only so much of them as is attributable to that permanent establishment. Dta that where the law of the Contracting State in which the permanent establishment is situated imposes a restriction on the amount of the executive and general administrative expenses which may be allowed, and that restriction is relaxed or overridden by any Convention, Agreement or Protocol signed after 1st Franve,between that Contracting State and a third State which is a member of the OECD, the competent authority of that Contracting State shall notify the competent authority of the other Contracting State of the terms of the corresponding paragraph in the Convention, Agreement or Protocol with that third State immediately after the entry into force of that Convention, Agreement or Protocol and, if the competent authority of the other Contracting State so requests, the provisions of that paragraph shall apply under this Convention from that entry into force.

Further, if a taxpayer is becoming a resident of both countries by applying the local tax laws, then his residential status is determined by applying the tie-breaker rule jndia the dtaaa DTAA.

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This would imply that the income is not included in taxable income at all. Then he will be eligible to claim the credit for the foreign taxes in respect franec the doubly taxed income against the respective tax liability in the country of residence. Convention between the Government of the Republic of India and the Government of the French Republic for the avoidance of double taxation and the prevention fance fiscal evasion with respect to taxes on income and on capital.

In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the Contracting State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of and subject to the limitations of the taxation laws of that Contracting State.


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For the purpose of this article, interest on funds connected with the operation of aircraft in international traffic shall be regarded as profits derived from the operation of such aircraft, and the provisions of article 12 shall not apply in relation to such interest.

News Articles Lending transactions: Interest arising in a Contracting State shall be exempt from tax in that Contracting State provided it is derived and beneficially owned by: Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, fees for technical services or the payments for the use of equipment, having regard to the royalties, technical services or the use of equipment for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount.

While the Protocol under the India — France DTAA is self-operational and does not require notification, the protocol in the India – Switzerland DTAA is given effect to by way of an amendment notification wherein it specifically provides that governments of each of the states shall notify each other that the legal requirements for giving effect to the Amending Protocol have been satisfied and it shall enter into force on the date of later of the notifications.

The Court also dismissed the contention of the Revenue that when reference is made to one convention signed between India and another OECD member state for the purposes of ascertaining if it had a more restrictive scope or a lower rate of tax, then only that convention has to be used for both the purposes i. The Services were provided by Steria France through telephone, fax, e-mail only and there was no presence of any personnel of Steria France in India and hence no risk of Permanent Establishment fixed or agency of Steria France in India existed.

Profits and other positive income arising in India and which are taxable in that Contracting State in accordance with the provisions of this Convention, are taken into account for the computation of the Farnce tax where such income is received by a resident of France.

Ships, boats and aircraft shall not be regarded as immovable property. A Lost Pursuit October 06, Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

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Sections 10 410 4B10 15 iv franec interest section 10 6 viia covering salaries and section 80L covering interest and dividends, of the Income-tax Act, 43 ofso far as they were in force on, and have not been modified since, the date of the signature of this Convention, or have been modified only in minor respects so as n.

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Do remember data each DTAA has some or the other beneficial provision which can help in avoiding double taxation.

In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. The beneficiary shall be entitled to a tax credit against French tax attributable to such imdia.

Capital represented by ships and aircraft operated in international traffic and by movable property pertaining to the operation of such ships and aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

International Taxation >Double Taxation Avoidance Agreements

For event material please click here Seminar Seminar: This is the most commonly used method of providing relief from double taxation and finds ftaa in almost all the tax treaties. No country would like any person to take away the income earned in it, without the due taxes being discharged by the individual.

This Article shall not apply to income inddia research if such research is undertaken primarily for the private benefit of a specific person or persons. If the tax rate in the resident country is lower than the foreign country, then he will be able to claim only to the extent of the rate at which the income is taxable in francce country.

Subject to the provisions of paragraph 3, where an enterprise of one of the Contracting States carries on business francf the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

See our recent deals. Under this method, the taxpayer can claim his foreign source income as exempt from tax. August 08, High court allows import of Inida treaty into France treaty: Get our top news delivered to your inbox every morning, Monday to Friday.