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The Taxation of Permanent Establishments:

an international perspective

by Radhakishan Rawal

Foreword by Philip Baker, QC

Publication date: September 2006    Price £75.00      ISBN:  978 1904905 45 5

Taxing the profits of permanent establishments has become a major concern for governments across the world, and for international business as a result. This guide will be an invaluable tool for multinational businesses and their advisers.

British Tax Review, Issue 2 (Sweet & Maxwell) Read the full review here

This book has a companion Special Report Taxing Permanent Establishments: analysis of Article 7 of the OECD Model Treaty, with additional coverage of tax treatment of PEs in France, Germany, Italy and Spain.

Buy both works for £105 and save 30%

The dramatic advances in communications and technology that have taken place in recent years, combined with the progressive development of the Indian economy, have enticed many multi-national companies to tap the rich resources which India has to offer in terms of front-line business support services and customer relations.

This has thrust the Indian tax system into the limelight, with multi-nationals and their advisers now needing to become familiar with the relevant aspects of Indian tax law and practice, and in particular, how India approaches taxation of permanent establishment.

This book’s principal theme is the taxation of permanent establishments, taking as its starting point the OECD model convention on the avoidance of double taxation, and examining how the Indian courts and India’s law-makers have interpreted the rules governing attribution of profits. The book also contains analysis of Article 7 of the UN and the US Model. The book contains comparative analysis of Article 7 of the tax treaties signed by China, India, Netherlands, UK and USA with most of the other countries. Thus effectively Article 7 of more than 300 tax treaties is analysed by the author. The book also deals with the OECD work on Attribution of Profits to Permanent Establishment.

It deals with the current issues to which the establishment of business centres in India by multi-nationals have given rise, relating how the law is developing to take account of these latest international business trends.

Service PE is a concept under the UN Model and interpretation of the Service PE clause has resulted in significant complications in the recent years. A major portion of these complications are attributable to the Business Process Outsourcing (BPO) industry. This book contains a specific chapter dealing with the interpretation of Service PE provisions.

From the Foreword by Philip Baker, QC

"Two significant, recent developments come together in the new edition of this book by Radhakishan (“RK”) Rawal.

 The first development is the growth of India as a major participant in the international tax world.  Consequent on the policy of encouraging foreign investment, more foreign businesses have started to invest or establish themselves in India.  This has given rise to a range of new international tax issues, some of which had not previously been faced in that country.

The second development has been the growing attention from the international tax community to the issue of attribution of profits.  For over five years the OECD has been devoting attention to this topic, and has published four Discussion Drafts which are analysed in detail in this book.  At the time that the first edition was published, it recorded that the OECD hoped to complete the work by 2004: at the time that the second edition appears, it is now clear that the OECD will not finish its work by the beginning of 2007.

This book is unique in combining these two recent developments: it considers in detail the Indian approach to the attribution of profits, in a way that will be of significant assistance to foreign businesses operating in India.  It also analyses in detail the OECD and US Models, and the recent OECD work."

About the author:

Radhakishan Rawal, of PwC, India, is a Manager in the Tax & Regulatory Services team and is has more than 8 years experience in domestic and international taxation. He is commerce Graduate and a member of the Institute of Chartered Accountants of India since 1997. He is also a member of the Institute of Company Secretaries of India and the Institute of Cost and Works Accountants of India. He is also a Certified Treasury Manager.

Spiramus Press Ltd,  is registered in England and Wales (number 4827945). Registered address: 102 Blandford Street, London W1U 8AG. VAT no. GB 8322712 52.

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