The Supreme Court of India has delivered a landmark judgment in Hyatt International Southwest Asia Ltd. v. Additional Director of Income-tax, confirming that Hyatt International has a Fixed Place Permanent Establishment (PE) in India under the India-UAE Double Tax Avoidance Agreement (DTAA). Despite being incorporated in the UAE and performing services primarily from Dubai, the Court found that Hyatt’s strategic and operational control over its Indian hotel operations—through long-term agreements, employee oversight, and decision-making authority—constitutes a taxable presence in India.
This ruling reinforces the principle that the substance of control and operational involvement prevails over the contractual form when determining the existence of a PE. It serves as a critical precedent for multinational entities providing cross-border services, emphasizing that income may be taxable in India even if the non-resident does not maintain a formal office within the country.
