18 July 2011
Dear Experts, please help me solve the following query:
Suppose there is an Indian company which has a branch in Singapore which is controlled from India. Further the Singapore (branch) Co. provides some consultancy services (in nature of business income) to the Indian Co., Can the Indian Co. be called as the permanent establishment (PE) of the Singapore Co. as under article 5 of the DTAA? If so, whether such services are chargeable to tax in India as per Article 7 of the DTAA?
19 July 2011
Branch and Indian Company are one only i.e. Branch is just an extended arm of Indian company. So there is no question of Branch making its Parent Company a PE.
The income of Singapore Branch shall be clubbed in the Indian company accounts.
There shall be Transfer Pricing requirement for the transactions between Indian company and branch office.
CAclubindia
