Avoiding double taxation requires careful planning

Almost all agreements aimed at avoiding double taxation (DTAA) define the term permanent establishment, which is a very important concept when it comes to taxing business profits.

The term “permanent establishment” broadly refers to a fixed place where the business of an enterprise is carried out in its entirety or in part.

As long as it lasts for more than a year, a permanent establishment can refer to a variety of locations.

A permanent establishment can be a place of management or a brah. It can be an office, a factory, a workshop, a mine, an oil or gas well, a quarry or any other place where natural resources are extracted. An enterprise’s permanent establishment can also be a building site or a construction site or an installation project.

Sumes Dewan, is a partner at KR Chawla & Co Advocates & Legal Consultants. The firm is headquartered in New Delhi and has offices in Chennai and Bangalore as well as a representative office in Singapore.