Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT Audit :: form 3cd :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: TDS :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD
 
 
« General »
 Tax breather for foreign investors: All you need to know
 What the increase in tax collections does not tell us about Indian economy post demonetisation
 India’s crazy retrospective tax on foreign funds will tarnish country’s reputation
 How tax related, PAN grievances can be resolved through E-Nivaran
 Tackling income tax exemptions for equities and agriculture
 Amfi wants tax benefits for retirement plans
 Top five factors which could chart market direction in the coming week
 Tax rate hikes boost shadow economy
 Tax mop-up may decline in new amnesty scheme
 Weeks before Budget, Finance Minister Arun Jaitley lists out benefit of low tax rates
 Second home loan tax benefits

Company paying tax in Germany can claim tax concessions in India
September, 16th 2008

In what could open a floodgate to tax concession claims, a tax tribunal has ruled that if a company, irrespective of its location, pays trade tax in Germany, it can claim concessions provided by the tax treaty with Germany.

The ruling was given by a division bench of Income-tax Appellate Tribunal (ITAT). Delivered by KC Singhal and RS Syal, the ruling was on an appeal filed by the Income-tax department in the case of Chiron Behring GMBH & Co.

The limited partnership firm, registered in Germany, has been allowed by ITAT to claim a lower interest rate of 10% on the royalty and technical services fee received from India. The ITAT ruled that Chiron Behring is a resident in Germany because it was paying trade tax in Germany and was, therefore, entitled to tax concession provided under the Indo-German tax treaty.

The issue here was whether the company was entitled to a lower tax rate of 10% of royalty and fees for technical services generated in India, on the basis of the Double Taxation Avoidance Agreement (DTAA) between Indian and Germany. The Indo-German DTAA allows a lower tax rate of 10% on a German company while the rate of taxation under the Indian I-T Act is 20%.

The assessing officer held that the company was not a German resident for tax purposes as it was not paying tax in Germany. To this, the German company replied that it was a resident of Germany on the strength of the fact that it was paying trade tax in Germany. The assessing officer differed on this point saying the trade tax paid by the company in Germany is not a tax mentioned in DTAA.

According to him, it is like a turnover tax. From this, the assessing officer construed that since it did not pay in Germany the kind of tax mentioned in DTAA, the company was not entitled to be considered a resident of Germany and the concession provided under DTAA.

Mr Singhal, in his order, pointed out that the assessing officer himself had accepted that the company is a resident of Germany by his admission that the company is a limited partnership firm under German Law. Secondly, Mr Singhal pointed out that trade tax is among the four kinds of tax that figure in the Indo-German DTAA. ITAT also pointed out that the assessing officers charge that trade tax in Germany is tantamount to a turnover tax, was made without any foundation.

Gewerbesteuer is somewhat similar to the Indian municipal tax paid by every business in Germany, irrespective of his residential status, to the local town or village council. The tax is computed as a percentage of profit.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
System Testing Solution Manual Software Testing Solutions Automation Software Testing Solutions System Workflow Testing System Manual Testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions