Deputation of expatriates to an Indian subsidiary does not, by itself, create a fixed-place PE in India – Delhi bench of the Income-tax Appellate Tribunal

In brief

The Delhi bench of the Income-tax Appellate Tribunal (Tribunal), in a recent ruling¹ , concluded that the deputation of expatriate employees by a Korean enterprise to its Indian subsidiary did not, by itself, constitute a permanent establishment (PE) in India.

The Tribunal concluded that the conditions for a fixed-place PE under Article 5 of the India-Korea Double Taxation Avoidance Agreement (DTAA) were not satisfied, as the Revenue failed to establish that the taxpayer carried on its business wholly or partly through a fixed place in India.