The Resource Taxing cross-border digital services - need for consistency

Taxing cross-border digital services - need for consistency

Label
Taxing cross-border digital services - need for consistency
Title
Taxing cross-border digital services - need for consistency
Creator
Subject
Language
  • eng
  • eng
Summary
Language used in drafting contracts in information technology and digital transactions from an intellectual property protection perspective has been picked up by tax authorities and some courts this year resulting in adverse tax consequences. Taxation of cross-border transactions often involves a number of complex issues. In the case of cross-border payments, especially for the use of software, online facilities or IT infrastructure, one of the most litigated issues is the nature or characterization of these payments. Conflicting opinions have been expressed by different tribunals and courts on payments made to foreign services providers for cloud services or services on an online platform namely whether such payments should be considered as "royalty", "fee for technical services" (FTS) or just "business income". This characterization is significant as India's taxing rights under its tax treaties are different for different kinds of income. Remittance for royalty and FTS are subject to withholding tax in India. However, business income earned by a nonresident is generally not taxable in India unless such income may be attributed to a permanent establishment (PE) of such nonresident in India. As a result, the tax authorities often argue in favor of treating such remittances as royalty payment or FTS, where they are unable to make a strong case for the existence of a PE of a nonresident in India
Citation source
In: Tax management transfer pricing report. - Arlington. - Vol. 27 (2018), no. 25 ; 3 p
http://library.link/vocab/creatorName
  • Sharma, S. (Shashwat)
  • Nagappan, M
  • Gokhale, G
Geographic coverage
Asia
Language note
English
http://library.link/vocab/subjectName
  • DST
  • information technology
  • income classification
  • royalties
  • technical services
  • business profits
  • tax treaty
  • withholding tax
  • PE
  • tax authorities
  • non-resident
  • case law
Label
Taxing cross-border digital services - need for consistency
Link
https://library.ibfd.org/custom/web/SD_PDF/scans/2018/T/TAXMATRP/vol.27/25_Taxing.pdf
Publication
Note
20181219

Library Locations

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      52.3736660 4.9336932
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