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PwC ASIA-PACIFIC TAX GROUP UPDATE
The U.S. and Indian Competent Authorities have agreed that a server located in India can constitute a permanent establishment (PE). What remains unclear is how much profit is attributable to an Indian PE server.
Credit card service provider VISA International ("VISA") invoked the Mutual Agreement Procedure (MAP) under Article 27 of the 1989 India-U.S. income tax treaty in response to a tax assessment raised by the Indian tax administration. The tax assessment held that VISA's ownership of a computer server in India constituted a permanent establishment...