Analysis, Income Tax

A Data-Driven Look at Permanent Establishment

On June 6, 2018, the Authority for Advanced Rulings pronounced its decision in the case of MasterCard Asia Pte. Ltd. on the issue of whether there was a permanent establishment of the company in India or not.

In a detailed judgment, the Authority ruled as follows:

  • The setting up of Indian operations of MasterCard has resulted in formation of a fixed place PE, service PE and dependent agent PE in India under Article 5 of the India–Singapore Double Taxation Avoidance Agreement.
  • The fees paid to MasterCard Singapore by Indian banks and financial institutions for payment processing services offered by MasterCard Singapore would be classified as royalty income.

Permanent Establishment is one of the most widely litigated upon issues in the international tax jurisprudence of India. MasterCard will soon join the ranks of the same, with the company having filed a writ petition before the Delhi HC against the AAR Ruling.

Taking this case as a model, we decided to break down the prominent issues of Permanent Establishment in India and scrutinise them through the lens of data analytics. Have a look at the report and discover how analytics can give you not just insights on cases, but also judges and their behaviour, enabling you to key in on a winning litigation strategy.

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