The protocol amending the agreement between the Government of India and Australia was signed on the December 16, 2011. However, it has been notified on September 20, 2013. It is effective from April 2, 2013. Now Force of attraction' concept is removed from Article 7(1) with insertion of new Article 7(1). As per the new clause, the business profits of the enterprise may be taxed in the other State but only so much of them as are attributable to that PE.
Threshold limit for establishing Service PE has been increased to 183 days. Earlier treaty did not provide for any threshold limit for establishing construction PE. However, the protocol provides for threshold limit of 183 days and 90 days on use of substantial equipments and on activities in connection with exploration of natural resources.
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