Profit attribution to permanent establishments for foreign companies in India.
A foreign company is taxable in India on business profits only to the extent they are attributable to a permanent establishment in India. Whether a PE exists - a fixed place of business, a dependent agent concluding contracts, or in some treaties a service PE arising from the presence of personnel - is intensely fact-driven and is a frequent subject of Indian tax litigation.
Once a PE is found, the question shifts to how much profit is attributed to it under Article 7 and Indian attribution principles. AMLEGALS advises foreign companies on structuring their India activities to manage PE risk, and defends PE and attribution positions before the tax authorities and tribunals, drawing on the settled Supreme Court jurisprudence on fixed-place, agency and service PE.
Reviewing the India activity - premises, personnel, agents and contracts - against the fixed-place, agency and service PE tests.
Adjusting the operating model, agency terms and secondments to manage PE exposure lawfully.
Determining the profit attributable to any PE under Article 7 and Indian attribution principles.
Building the functional and factual record to support the PE and attribution position.
Representing the foreign company in PE assessments and before the appellate tribunals.
Securing relief through the treaty, MAP or APA where double taxation arises.
A fixed place of business through which the enterprise operates, a dependent agent who habitually concludes contracts for the enterprise, and under some treaties a service PE arising from the presence of personnel beyond a threshold period. The determination is fact-specific and treaty-dependent.
Only the profit attributable to the Indian PE is taxed, determined under Article 7 and Indian attribution principles by reference to the functions performed, assets used and risks assumed in India. AMLEGALS computes and defends the attribution.
A subsidiary is a separate taxpayer, but it can constitute a PE of the parent if it acts as a dependent agent or the parent carries on business through its premises or personnel. The arrangement must be structured and documented to avoid an unintended PE.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing. An initial discussion is confidential and is used only to understand the matter and assess fit.
Share the key facts for a confidential preliminary assessment of your India matter.