CA Sandeep Bhatnagar (Practice) (1121 Points)
08 January 2010A 100% Indian subsidiary of a foreign company wishes to appoint a foreign national as director after an Indian director vacated the office. There is no other Indian on the board.
Whether this action would result of the company being treated as a PE as the management and control would go into foreign hands ?
An elaborative answer would be a welcome.
Thanks
Sandeep Bhatnagar
Amir
(Learner)
(4016 Points)
Replied 08 January 2010
Dear Sandeep,
Plz specify in which context u r talking..
What difference would it make even if it becomes a PE as u have mentioned..
CA Sandeep Bhatnagar
(Practice)
(1121 Points)
Replied 08 January 2010
Dear Amir,
If the company becomes a PE then the iincome relatable to its business in India shall also become taxable in India, as the Indian company pays Royalty and also receives services of technical nature from the foreign company ?
Amir
(Learner)
(4016 Points)
Replied 08 January 2010
Dear Sandeep,
Having a 100% Subsidary in India, doesn't make it a PE of the Foreign Company..
Because PE as defined includes a fixed place of business through which the business of the enterprise is wholly or partly carried on;
Since a Subsidary Co is a entity different from it's Holding Company it cannot be said as a PE of Foreign Company..
The fact that it has all foreign director's have no relevance..
Amir
(Learner)
(4016 Points)
Replied 08 January 2010
Dear Sandeep,
Needless to say that provisions of TRANFER PRICING shall APPLY.
Input Tax Credit, GST refunds and Recovery of refunds- Roadblocks and way outs
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