India

Recent Indian TP court ruling suggests change of direction on AMP expenses

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The case of Luxottica India Eyewear Pvt. vs Acit was heard in New Delhi on 23 May 2017 and the decision on 25 May has created new uncertainty for multinationals operating in India. Read the rest of this entry »

Supreme Court rules that the F1 World Championship has a PE in India.

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Source: business-standard.com

The Indian Supreme Court has upheld an earlier High Court decision that the Formula One World Championship (F1) has a Permanent Establishment (PE) in India and so is liable to be taxed there for the Indian F1 race.

The High Court had previously held that provided the presence of a taxpayer was in a physically defined area, permanence in such a place could be relative to the context of the business. “The taxpayer carried on business in India for the duration of the race, two weeks before it and a week after the race. Consequently, the F1 circuit constitutes a fixed place of business under Article 5(1) of the India-UK tax treaty.”

Also it was held that payments made to F1 were business income and not royalty, as the logos used during the championship were not for intellectual property purposes but for hosting the event.

The Supreme Court ruling “has dealt with the most litigated subject of tax, PE, which has evolved over time to be much more than the fixed structure of brick and mortar from where the business of the assessee is conducted. In this case, for the first time in the history of tax litigation, a car race circuit has been held to be the fixed place PE of the assessee,” said Rakesh Nangia, managing partner, Nangia and Co.

Details of the ruling are yet to be made public.

Source article here

 

Apple to start making iPhones in India

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Source: bbc.co.uk 3rd February 2017

Apple is to start making iPhones in the southern Indian state of Karnataka, the state’s government has said.

Apple has held a series of meetings with government representatives at both state and national level and is understood to be pressing for concessions before going ahead with such a move.

Apple is currently unable to set up its own branded stores in India, which has a raft of rules to curb the activities of foreign companies.

For it to be able to sell direct to customers in India, Apple would have to source 30% of the components of its products locally.

Indian media has been speculating about Apple for a while. The iPhone is much coveted as a status symbol in the country, but it’s very expensive for most people.

Source article here