India’s Authority of Advance Ruling (AAR) has delivered a judgment which deviates from a High Court precedent, meaning foreign companies must carefully analyse the tax treatment of Indian permanent establishments (PEs) receiving royalties and fees for technical services (FTS) before structuring their operations in the jurisdiction.
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The new guidance is not meant to reflect a substantial change to UK law, but the requirement that tax advice is ‘likely to be correct’ imposes unrealistic expectations
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