Supreme Court rules on Application of MFN clause in tax treaties
October 25, 2023Referring to our update on Application of MFN clause under a tax treaty : Relevance of a third country being a member of OECD on the date of signing of tax treaty and whether a specific notification required to make MFN effective (Delhi High Court) dated May 3, 2021, and Clarity on Application of MFN clause in view of […]
Clarity on Application of MFN clause in view of the recent CBDT circular (Pune Tribunal)
March 2, 2022The applicability of MFN clause in Indian tax treaties has been subject to debate in recent past. The Central Board of Direct Taxes (“CBDT”) has also recently released a circular dated February 3, 2022, clarifying the applicability of MFN clause present in Indian tax treaties. The Circular was released in response to the unilateral directives issued […]
Non-applicability of LOB clause under India-UAE tax treaty and Relevance of timing as to when the application of LOB to a tax-treaty needs to be referred (Mumbai Tribunal)
May 23, 2021Under the context of tax treaties, application of a Limitation of Benefits (LOB) clause would result into denial of treaty benefits if main purpose of the transaction or one of the main purposes of the transaction is to obtain a treaty benefit. In the backdrop of businesses growing in multi-folds the Governments across the globe […]
Application of MFN clause under a tax treaty : Relevance of a third country being a member of OECD on the date of signing of tax treaty and whether a specific notification required to make MFN effective (Delhi High Court)
May 9, 2021Under the context of tax treaties, an MFN clause is incorporated where one of the contracting countries decide to grant MFN status to the other contracting country in relation to specified income streams. The residents of the MFN country are given the same beneficial treatment that India has extended to a resident of a third […]
Characterization and Taxation of Software Payment – Supreme Court rules in favor of the taxpayers
March 11, 2021The taxation of income from the sale of computer software in cross-border transactions has been a contentious issue in India for many years, with the key question being whether such income should be characterized as royalties (triggering an Indian withholding tax) or as sales/business income (triggering no Indian tax in the absence of a permanent […]