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Corporate guarantee fee paid to Netherlands based AE not liable to tax in India as ‘interest’ or ‘FTS’

June 29, 2020[2020] 117 343 (Delhi - Trib.)

INTERNATIONAL TAXATION - I: Where assessee company paid corporate guarantee fee paid to its AE located in Netherlands, in absence of any provision of capital and debt claim between parties, amount so paid was not liable to tax as 'interest' in India under article 11 of India-Netherlands DTAA

INTERNATIONAL TAXATION - II: Where assessee paid corporate guarantee fee to its AE based in Netherlands which was brought to tax by revenue authorities in India under article 12 of India-Netherlands DTAA as 'fee for technical services', in view of fact that it was a case of rendering financial services and by no stretch of imagination it could be regarded as providing 'consultancy services', payment in question was not taxable in India under article 12 of India-Netherlands DTAA

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