 "MNCs with permanent establishment to pay tax on pre-negotiated income")
Multinational companies (MNCs) having a permanent establishment (PE) in India could soon get clarity on taxes they are supposed to pay.
In the Union Budget 2020, the government allowed these firms to enter into advance pricing agreements (APAs) with the income-tax authorities. In those they can negotiate how much of the margins on profits accrued in India would be taxed for having a PE in India.
Until now, such an arrangement was possible only in transfer-pricing matters. Tax experts say the move will improve MNCs’ compliance with Indian laws on PEs. In the absence of tax clarity, foreign firms avoided
