Govt panel submits report on taxing profits of foreign companies

On profit attribution, the report states that profits derived from India need to be defined objectively

A Central Board of Direct Taxes (CBDT)-appointed committee has submitted a report on taxing the profits of non-residents, including multinational corporations, with a permanent establishment (PE). A PE is a fixed place of business that generally gives rise to tax liability in a particular jurisdiction.

The board has invited suggestions from stakeholders within a month. India deals with the issue under the provisions of the Income Tax Act, and the Double Taxation Avoidance Agreements (DTAAs) with individual countries. There are various ways suggested by the panel to attribute profits to companies operating in India.

On profit attribution, the report states that profits