CBDT Draft Report on PE Profit Attribution – A Different Angle

CBDT recently released a Report on Attribution of Profits to Permanent Establishment for public consultation. This report has generated significant debate within the Indian tax fraternity and this is likely to spill over globally as well. The author would like to thank Taxsutra for facilitating deliberation on the proposal through number of articles. A lot has already been said and written on the Report and as a late comer the author feels it appropriate to comment only on specific issues and bring out new viewpoints.

It is now well accepted by all that the current tax laws (or at least some of them) are obsolete as a result of fast changing technology and new business models, even the transfer pricing provisions and the supremacy of the ALP principle appear to be getting challenged and the struggle for setting new rules is yet to see light at the end of the tunnel. The solution could be a new law or even reading the existing law in a different manner. The author according thinks it appropriate not to get constrained by his previous work on the issue of attribution, interpretations taken or not considered by him about fifteen years back in his publications.

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