Navigating International Tax and Transfer Pricing: Key Updates for April 2024
In the ever-evolving landscape of international taxation and transfer pricing, staying ahead of regulatory and judicial developments is crucial for businesses operating across borders. The April 2024 edition of CNK & Associates’ quarterly update offers vital insights into recent rulings, treaty amendments, and compliance considerations that could significantly impact multinational corporations.
This edition highlights several key developments:
- The classification of letters of comfort issued to banks on behalf of subsidiaries as international transactions under Section 92B.
- A favorable ruling for U.S.-based LexisNexis, where subscription fees for database access were not deemed taxable as fees for technical services in India.
- Clarification that fees for technical services received by Mauritius entities are not taxable in India in the absence of a relevant treaty clause—particularly before Article 12A came into force in 2017.
- The issuance of a new notification impacting royalty and FTS taxation under the India-Spain tax treaty.
- Introduction of the Principal Purpose Test (PPT) in the India-Mauritius Tax Treaty to curb treaty shopping and prevent tax avoidance.
These updates reflect the tightening of treaty interpretations, growing scrutiny on cross-border transactions, and the emphasis on substance over form in claiming tax treaty benefits.
