Double taxation occurs when the same income is taxed by both the country where it originates (source country) and the country of the taxpayer's residence (residence country). To reduce barriers to international trade, countries often negotiate double taxation avoidance agreements (DTAAs) which allocate taxing rights between the two countries. India has entered into over 60 such agreements. DTAAs aim to eliminate double taxation through methods like exemption (one country does not tax) or tax credit (residence country provides credit for taxes paid in source country). They define terms like permanent establishment that determine when business income can be taxed in the source country. DTAAs and limitations of benefits clauses help prevent treaty shopping where third parties get benefits not
This PPT is mainly on the basics of International Taxation which is confusing for many students and many professionals too nowadays. During this evolving world of multinational culture, International Taxation has gained significant importance of which all the professionals should be aware of.
I have tried to compile the concepts of international taxation in this PPT except the concept of Transfer Pricing which in itself is like a whole book.
I have inserted the core concepts which lead to the emergence of International Taxation in India.
The basics about international treaties designed to prevent fiscal evasion, avoid double taxation and more recently to demonstrate compliance with global standards on transparency and the exchange of confidential taxpayer information. Commonly referred to as 'double taxation agreements' there are over 2,000 of this bilateral agreements in existence. www.franhendy.com ; @franhendy; www.facebook.com/franhendy
This PPT is mainly on the basics of International Taxation which is confusing for many students and many professionals too nowadays. During this evolving world of multinational culture, International Taxation has gained significant importance of which all the professionals should be aware of.
I have tried to compile the concepts of international taxation in this PPT except the concept of Transfer Pricing which in itself is like a whole book.
I have inserted the core concepts which lead to the emergence of International Taxation in India.
The basics about international treaties designed to prevent fiscal evasion, avoid double taxation and more recently to demonstrate compliance with global standards on transparency and the exchange of confidential taxpayer information. Commonly referred to as 'double taxation agreements' there are over 2,000 of this bilateral agreements in existence. www.franhendy.com ; @franhendy; www.facebook.com/franhendy
Concept of residence under income tax act (with the concept of dtaa and poem)Amitabh Srivastava
The concept of Residence under Income tax is a very critical issue as incidence of tax differs on the basis of Residential nature of the assessee.Further the concept of POEM and DTAA is very relevant issues which are to be read with it.
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
Permanent Establishment & Business Connection and it's Impact on Taxability o...DVSResearchFoundatio
Key Takeaways
Understanding Permanent Establishment and Business Connection
Attribution of Profits
Interplay of Permanent Establishment and Business Connection
Illustrations and Judicial Precedents
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
B C Shetty & Co., Chartered Accountants are a dominant force when it comes to dealing with International Taxation.
Here we have a small demo of what we do in this regard.
The remittance of funds abroad from perspective of Income Tax Act, 1961 (“IT Act”) requires a clear understanding of its process flow (right from the applicability of the Act to the procedure in which the funds will be remitted outside India). By way of this presentation, we have tried to simplify the Income Tax provisions for remittance of funds abroad for our readers.
Why to determine Residential Status?
Categorization of Residential Status.
Rules for determining the Residential Status :
Section 6(1) - Rule for determining the Residential Status of an Individual
Section 6(2) - Rule for determining the Residential Status of an HUF, Firm, AOP, BOI
Section 6(3) - Rule for determining the Residential Status of Company
Section 6(4) - Rule for determining the Residential Status of any other person
Glance on Incidence of Tax
Concept of residence under income tax act (with the concept of dtaa and poem)Amitabh Srivastava
The concept of Residence under Income tax is a very critical issue as incidence of tax differs on the basis of Residential nature of the assessee.Further the concept of POEM and DTAA is very relevant issues which are to be read with it.
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
Permanent Establishment & Business Connection and it's Impact on Taxability o...DVSResearchFoundatio
Key Takeaways
Understanding Permanent Establishment and Business Connection
Attribution of Profits
Interplay of Permanent Establishment and Business Connection
Illustrations and Judicial Precedents
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
B C Shetty & Co., Chartered Accountants are a dominant force when it comes to dealing with International Taxation.
Here we have a small demo of what we do in this regard.
The remittance of funds abroad from perspective of Income Tax Act, 1961 (“IT Act”) requires a clear understanding of its process flow (right from the applicability of the Act to the procedure in which the funds will be remitted outside India). By way of this presentation, we have tried to simplify the Income Tax provisions for remittance of funds abroad for our readers.
Why to determine Residential Status?
Categorization of Residential Status.
Rules for determining the Residential Status :
Section 6(1) - Rule for determining the Residential Status of an Individual
Section 6(2) - Rule for determining the Residential Status of an HUF, Firm, AOP, BOI
Section 6(3) - Rule for determining the Residential Status of Company
Section 6(4) - Rule for determining the Residential Status of any other person
Glance on Incidence of Tax
Organizations over the globe are investigating freedoms to reach out in different topographies as globalization gets urgent. The likelihood to become worldwide pioneers is the thing that is constraining an ever-increasing number of organizations out of their nations of origin. We, Lex N Tax is the best International Taxation that serves you in each circle of worldwide tax collection.
Serving in different purviews additionally delivers freedoms to diminish expenses and increment piece of the overall industry around the world. Notwithstanding, the mind boggling laws, remembering the tax assessment laws for various regions, can execute abroad extension time depleting and costly. Regardless of whether you are a homegrown Indian organization pondering to extend abroad or an unfamiliar organization trying to put resources into India, you should know the laws and guidelines that can impact your business methodologies and plans. We have global coalitions and have close binds with our unfamiliar offshoots Lex N Tax have the specialized in International Taxation Services to help you in exploring through the perplexing labyrinth of global duty laws around the world. Lex N Tax Associates one the Best Tax Consultants Services.
Anti-Treaty Shopping: A Comparative Analysis of the U.S. and OECD Model Tax C...Akunobera
The presentation highlights the key approaches taken by the U.S. and the OECD to combat treaty shopping techniques and highlights key differences between those approaches.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
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The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
#money
1. Double Taxation Avoidance Agreement (DTAA)
One of the most heavily guarded jurisdictions of a country is its fiscal jurisdiction. Therefore, even in
the age of globalization, double taxation continues to be one of the major obstacles to the development
of international economic relations. The Fiscal Committee of OECD in the Model Double Taxation
Convention on Income and Capital, 1977, defines double taxation as ‘the imposition of comparable
taxes in two or more states on the same tax payer in respect of the same subject matter and for identical
periods’. Whereas a tax payer’s own country (referred to as home country) has a sovereign right to tax
him, the source of income may be in some other country (referred to as host country) which also claims
a right to tax the income arising in that country. Nations are often forced to discuss and settle the claims
of other nations by means of double taxation avoidance agreements, in order to bring down the barriers
to international trade.
Double tax treaties are settlements between two countries, which include the elimination of international
double taxation, promotion of exchange of goods, persons, services and investment of capital. This is
because, the interaction of two tax systems of two different countries can result in double taxation.
Every country seeks to tax the income generated within its territory on the basis of one or more
connecting factors such as location of the source, residence of taxable entity and so on. Double Taxation
of the same income would cause severe consequences on the future of international trade.
Countries of the world therefore aim at eliminating the prevalence of double taxation. Such agreements
are known as "Double Tax Avoidance Agreements" (DTAA) also termed as "Tax Treaties".
Following the footsteps of most countries of the world that levy tax on income / capital, India has also
imposed Income Tax on the "total world income" i.e. income earned anywhere in the world. The result
is that income arising to a resident out of India is subjected to tax in India as it is part of total world
income and, also in host country which provides the source for that income.
The statutory authority to enter into such agreements is vested in the Central Government by the
provisions contained in Section 90 of the Income Tax Act in terms of which India has, by the end of
March 2002, entered into 64 agreements of this nature which deal with different types of income which
may be subjected to double taxation. A list of such agreements and the respective years of their coming
into force forms annexure to this book. In addition there are 12 agreements which deal with only profit
of enterprises engaged in operation of aircraft and 5 which are limited to shipping profit.
Classification:
Depending on their scope, double taxation avoidance agreements are classified as Comprehensive and
Limited. While comprehensive Double Taxation Agreements provide for taxes on income, capital gains
and capital, Limited Double Taxation Agreements refer only to income from shipping and air transport,
or estates, inheritance and gifts. Comprehensive agreements ensure that the taxpayers in both the
countries would be treated equally, in respect to problems relating to double taxation.
Objectives:
The object of a Double Taxation Avoidance Agreement is to provide a settlement between the tax claims
of two governments, both legitimately interested in taxing a particular source of income. Firstly, they
help in avoiding the burden of international double taxation, by -
a) laying down rules for division of revenue between two countries;
b) exempting certain incomes from tax in either country ;
c) reducing the applicable rates of tax on certain incomes taxable in either countries
Secondly, the tax treaties help a taxpayer of a country to know with greater certainty the potential limits
of his tax liabilities in the other country.
2. Pattern of taxation
Double taxation agreements allocate jurisdiction to the concerned countries, with respect to the right to
tax a particular kind of income. The principle underlying tax treaties is to share the revenues between
two countries. If each country gets a reasonable share of tax revenues and the overall tax collection also
increases, both countries tend to benefit. Income from business, movable and immovable property
comes under the sphere of double tax avoidance agreement. The agreements provide of allocation of
taxing jurisdiction to different contracting parties in respect of different heads of income. In general, the
rules include that income from the business is taxed:
• only in the resident country, if the business entity has no activity in the source state;
• Only on the source state, if there is a fixed place of business, i.e. Permanent Establishment.
• Income form immovable property arising to a non-resident is taxed primarily in the state of its
location, i.e. the source state.
• Income from movable property such as dividends, interest and royalties are usually taxed in the
resident state, but the source state may also impose a reduced tax.
Methods of Eliminating Double Taxation:
The objective of double taxation can be obtained through tax treaties involving various methods or a
combination of the following methods:
(i) Exemption Method: This method is for the residence country to exclude foreign income from its tax
base and the exclusive right to tax such incomes goes to the source country. This is known as complete
exemption method and is sometimes followed in respect of profits attributable to foreign permanent
establishments or income from immovable property. Indian tax treaties with Denmark, Norway and
Sweden are of this nature with respect to certain incomes.
(ii) Credit Method: It reflects the underline concept that the resident remains liable in the country of
residence on its global income, however as far the quantum of tax liabilities is concerned credit for tax
paid in the source country is given by the residence country against its domestic tax as if the foreign tax
were paid to the country of residence itself.
(iii) Tax Sparing: One way of directing the foreign investment flows in India from foreign developed
countries, is to let the investor preserve to himself/itself benefits of tax incentives available in India for
such investments. This is done through the Tax Sparing method, where the tax credit is allowed by the
country of its residence, not only in respect of taxes actually paid by it in India but also in respect of
those taxes India forgoes due to its fiscal incentive provisions under the Indian Income Tax Act (ITA).
The regular tax credit is a measure of preventing double taxation, but the tax sparing credit extends the
relief granted by the source country to the investor in the residence country by the way of an inducement
to stimulate foreign investment flows and does not seek reciprocal arrangements by the developing
countries.
Applicability of Treaty benefits:
In order to get the benefit of a tax treaty, it is necessary to have an access to it. For that purpose, a person
must qualify in terms of the treaty as a:
- person
- resident of any of the Contracting states; and
- beneficial owner of the income by the way of dividends, interest or royalties for a lower rate of
withholding tax.
3. Residence of a Person:
The determination of the residential status of the tax payer is of great significance as the taxability of
income under the domestic laws depends upon it. Moreover, only the resident of a contracting state can
seek relief from double taxation. The expression ‘resident of contracting state’ refers to any person who,
under the laws of that state, is liable to tax therein by reason of domicile, residence, place of
management or any other criterion of a similar nature.
The treaty provision determines whether a person is a resident of a contracting state. It first considers a
person’s liability to tax as a resident under the respective taxation laws of the state. If a person is a
resident of both the contracting states, there are provisions to assign a single state of residence to him for
purposes of the treaty through tie-breaking rules.
Business Income:
The business income of a non-resident is taxable in India under section 9(1)(i) of the ITA only if it
arises, directly or indirectly, through or from any business connection in India, property in India, asset or
source of income in India, or through the transfer of an Indian capital asset. Explanation 2 of section
9(1) (i) contain an inclusive definition of business connection; as per which a business connection is said
to exist if any person carrying on a business activity acts on behalf of a non-resident and:
-- has and habitually exercises an authority to conclude contracts on behalf of the non-resident
-- has no such authority, but habitually maintains in India a stock of goods or merchandise from which
he regularly delivers goods or merchandise on behalf of the non-resident
-- habitually secures orders in India, mainly or wholly for the non-resident or its affiliates.
Permanent Establishment:
Double taxation agreement restricts the authority of the contracting states to tax business income of a
foreign enterprise only if such enterprise carries on business in India through a permanent establishment.
The term “permanent establishment” as defined in Article 5 means a fixed place of business through
which business of an enterprise is carried on. The definition requires performance of business activity
through a fixed place of business in another country. The expression has been defined as a fixed place of
business through which the business of an enterprise is wholly or partly carried on.
The first part of Article 5(1) suggests the existence of a fixed place of business, whereas the second part
postulates that the business is carried on through a fixed place. If the second part is not attracted, there is
no permanent establishment.
Treating shopping:
Treating shopping refers to the act of a resident of a third country taking advantage of a fiscal treaty
between states. A person acts through a legal entity created in a state essentially to obtain treaty benefits
that would not be available directly to such person. The basic feature of treaty shopping is to establish
base companies in other states solely for the purpose of enjoying the benefit of particular treaty rules
existing between the state involved and the third state.
An example of treaty shopping can be the double Taxation agreement between India and Mauritius.
Various companies have been incorporated in Mauritius to take advantage of the Indo-Mauritius DTAA
in which capital gains are to assessed as per the law of the resident state of the entity. However, under
the Mauritian law, tax is not levied on capital gains. This means that the capital gains made by the
Mauritian entity on transfer of shares in an Indian company go without assessment.
However, there has been a noticeable change in the approach of the States, particularly after the wide
reports of extensive money laundering and the tax evasion. As a consequence, a lot of countries are
4. adopting a “Limitation of Benefits” clause in the tax treaties so as to restrict third parties from taking
advantage of tax treaties between two other states.
Tax Haven:
Tax Haven or the place, in which certain taxes are imposed either at a low rate or not at all, is the best
possible way out for those interested in reducing their tax rates.
In some countries, high tax rates can deter the tax payers and lead them to relocate to areas with
comparative lower tax rates. This gives rise to tax competition among different governments. There are
many Tax Haven specified for different types of taxes as well as for different groups of people and
companies. It has the potentiality to transform the tax structure of any nation. As a result, there are also
some effective tax laws regulating the protections of the Tax Haven such that there are no revolutionary
changes or misuses within the economy.
There are some specific characteristics as being identified by the Organization for Economic Co-
operation and Development (OECD) to decide the tax structure of any nation to be denoted as Tax
Haven. These are –
• Regarding the situations when there is either payment of no/only nominal taxes. In special cases,
Tax Haven creates such conditions to offer themselves as shelters for the non-residents to evade
high taxes in their respective residential countries.
• Tax Haven generally stresses on protecting the personal financial information of the taxpayers.
They have specific laws for the benefit of corporate houses and individuals that can protect them
from the scrutiny and other strict laws of the foreign tax authorities.
Indian Tax Regime:
The Income Tax Act, 1961 governs taxation of income in India. According to section 5 of the ITA,
Indian residents are taxable on their worldwide income, and nonresidents are taxed only on income that
has its source in India. Section 6 defines who may be a tax resident and contains different residency
criteria for companies, firms, and individuals. The scope of section 5 is expanded by the ‘‘legal fiction
contained in section 9, which considers certain kinds of income to be of Indian source.
The ITA favors source-based taxation as compared to the OECD model conventions or treaties entered
into by many developed countries that favor residence based taxation. Indian courts have supported
source based taxation in several cases in the past.
Indian Policy With Respect To Double Taxation Avoidance Agreements:
The policy adopted by the Indian government in regard to double taxation treaties is as follows:
• Foreign trade with India should be relieved of Indian taxes considerably so as to promote its
economic and industrial development.
• There should be co-ordination of Indian taxation with foreign tax legislation for Indian as well as
foreign companies trading with India
• The agreements are intended to permit the Indian authorities to co-operate with the foreign tax
administration.
• Tax treaties are a good compromise between taxation at source and taxation in the country of
residence
5. India primarily follows the UN model convention and one therefore finds the tax-sparing and credit
methods for elimination of double taxation in most Indian treaties as well as more source-based taxation
in respect of the articles on ‘royalties’ and ‘other income’ than in the OECD model convention.
Conclusion:
The regime of international taxation exists through bilateral tax treaties based upon model treaties,
developed by the OECD and the UN, between the Contracting States. India has stepped into a wide
network of tax treaties with various countries all over the world to facilitate free flow of capital into and
from India. However, the international tax regime has to be restructured continuously so as to respond to
the current challenges and drawbacks.
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