CA Final DT

" International Taxation - Tax beyond geographical boundaries" By Arinjay Kumar Jain

International Taxation Course covering all concepts in cross border payments with specific reference to Indian context

Overview of " International Taxation - Tax beyond geographical boundaries" By Arinjay Kumar Jain

Table of contents

Article - 1 - Person Covered

1 Need for a tax treaty in International Trade

2 Need for a tax treaty in International Trade

3 What is a Tax Treaty

4 Various Models of Tax Treaties - UN, OECD and US Model

5 What are the key considerations for the Contracting Countries at the time of entering into Tax Treaty

6 Contents of a Tax Treaty - Various Clauses

7 Consideration of tax treaties - Not only tax

8 Provision of Income Tax Act, 1961 vs. Tax Treaty - Section 90(2) - Which one should be preferred

9 General provisions of Tax Treaty

10 Impact of subsequent amendment of Income Tax Act, 1961 on earlier tax Treaties

11 If an income is Taxable under the Income Tax Act, 1961, but there is no corresponding clause in Treaty/ Condition of relevant clause not satisfied(2)

12 Withholding tax - Governing rules vis a vis Tax Treaties

13 Interpretation of Treaties - Liberal or Strict

14 Tools for Interpreting Treaties - Protocol, Technical Expalnations, Mode Commentary, Case laws and others

15 Vienna Convention on Law of Treaties as an aid to Treaty Interpretation

16 Purpose of Model Commentaries - OECD and UN Model

17 Purpose of Model commentaries & India's stand on OECD Commentary

18 India's stand on UN Model Convention and UN Commentary

19 Other aids for Interpreting Treaties

20 Different views by two contracting states

21 Interpretation of "words" used in Treaty - Treaty definition vs Income Tax Act, 1961 provision vs general meaning

Article - 2 - Taxes Covered

1 Taxes Covered under Article 2 and its importance

2 Draft Article 2 of India Netherlands and India USA Treaty

3 Key Features and Coverage of Article

4 What is regarded as Taxes on income and on capital

5 Key feature of article 2(2) of india usa treaty

6 Article 2(3) - Specific countrywide taxes which are covered

Article - 4 - Residence

1 Who are Resident - Article 4(1)

2 Reasons of being liable to tax in a Country, which should be satisfied to become a resident

3 Whether Sovereign Funds and Collective Investment Vehicles are tax resident of a given State

4 Meaning of the Term Resident and Person

5 Interplay of Article 4(1) and Income Tax Act 1961

6 Liable to tax therein - Person who are not taxable

7 Proof of being a resident of a Contracting State

8 Article 4(2) - Tie breaker Rule in case of an individual

9 Permanent Home, centre of Vital Interest, Habitual abode and Nationality

10 Article – 4(3) – tie breaker rule – person other than an individual

Article - 5 - PE

1 Basics of Permanent Establishment and Business connection and there relevance in taxing business profits

2 Concept of Business Connection and Permanent Establishment under the Income Tax Act, 1961

3 Characterstics of Permanent Establishment and key components of the Presentation

4 What all is covered under Article 5

5 Fixed Place of Business Permanent Establishment - Article 5(1)

6 Meaning of "Business carried on by the PE" and certain Case studies on PE

7 Article 5(2) - Certain specific inclusion in Permanent Establishment and Construction and Installation PE

8 Service Permanent Establishment

9 Auxilliary or Preparatory Activities which do not result into a Permanent Establishment

10 Agency Permanent Establishment - Dependent Agent

11 "Habitually securing orders" in the Source State for NR resulting into Dependent Agent Permanent Establishment

12 Article 5(5) - Independent Agent Permanent Establishment

Article - 6 - Immovable Property

1 What is taxable under Article 6 - Immovable Property

2 What are the Right of India and Treaty partner to tax income from Immovable Property

3 What are the Key Issues in Article 6(1) - Location of property, computation of income

4 Meaning of " immovable property" and "Property used for providing Independent Personal Services"

5 Computation of income from immovable property

Article - 7 - Business Profits

1 Steps to be followed for ascertaining applicability of Article 7 - Business Profits

2 Structure of various clauses covered under Article 7 of the India USA Treaty

3 Right of the Source State to tax Business Profits and which profits are taxable in Source State under Article 7(1)

4 Computing profits attributable to a PE under Article 7(2)

5 Expenses allowed as a deduction in computing income of the PE and cross charges etc - Article 7(3)

6 Mere purchase of goods by PE and attribution of income - Article 7(4)

7 Profits from assets and activities of the PE - Article 7(5)

8 Taxation of items dealt with in other Article where recipient has a PE in India - Article 7(6)

9 Meaning of business profits under Article 7 (7)

10 Rule 10 of the IT Rules - Allocation of profits to NR

Article - 8 - Shipping

1 Profits from Shipping or Aircrafts business - Right to tax and condition for taxation under Article 8

2 Understanding impact of Place of Effective Management in Taxation of Shipping and Airline Profits

3 Conditions for applicability of Article 8 and income excluded from Article 8

4 Engineering Services to other Airlines - Whether covered under Article 8 of India UK Treaty as Airline profits

5 Article 8(2) – Meaning of Profits from operation of ships and aircrafts, Meaning of Inland Waterways

6 Article 8(3) – Profit from containers

7 Article 8(4) – Taxation of Profit from participation in a joint pool

8 Article 8(5) – Interest on funds connected with operations of Shipping and Airlines

9 Activities covered and excluded by Article 8

Article - 9 - AE

1 Learn why the concept of Associated Enterprise is important and what it means

2 Learn when two enterprise are AE under Article 9(1) and when are two Enterprise AE under IT Act

3 Circumstances under which two entities become Associated Enterprise under Article 9(1) of INDIA - USA treaty

4 CONTROL is the Power to administer , manage, direct, restrict, regulate, or govern.

5 Case Study on Excessive expenditure disallowance under Article 9(1)

6 Article 9(2) - Coorelative adjustments alongwith case studies and example

7 Secondary adjustment are adjustments which when made restore the taxation of income to exact levels, where it would have been if the transactions had taken place at arm’s length in the beginning –

8 Definition of AE under IT Act - Direct or Indirect Holding of 26% or more voting power in the Enterprise, Common person/ enterprise has direct or Indirect holding of 26% or more voting power in two Enterprise and "Definition of AE under IT Act - Direct or Indirect Holding of 26% or more voting power in the Enterprise, Common person/ enterprise has direct or Indirect holding of 26% or more voting power in two Enterprise

9 Guarantee of not less than 10% of total borrowings, Appointment by enterpriseof board of directors or members of the governing board and Appointment by same person - board of directors or members of the governing board and Know how etc. used in manufacture or processing of goods or articles, Raw material / consumables required for manufacture or processing of goods or articles

10 Price influenced by purchasers of article, Common individual/relative control, Hufcases, Ownership of more than 10% in firm/aop/boi and Other prescribed relationship

Article - 10 - Dividend

1 Key aspects to be covered in Article 10 - Dividend

2 Meaning of Dividend

3 Right to tax dividend, what is covered as dividend and meaning of dividend paid along with several examples - Article 10(1)

4 Right of Source State to tax Dividend - Part 1 - Conditions and examples on beneficial ownership

5 Beneficial ownership and right to opt for provision of Income Tax Act, 1961, if they are more beneficial

6 Meaning of Dividend - Article 10(3)

7 PE or Fixed base and taxation of dividend - Article 10(4)

8 Right to tax dividend declared by foreign company deriving income from State of Residence or third State

Article - 11 - Interest

1 Article 11 - Taxation of Interest and Various issues arising therein

2 Article 11 (1) – Right of state of residence to tax interest

3 Beneficial ownership test and examples on conduit companies for interest income

4 Exemption in source state for certain interest

5 Article 11(4) - What is covered as Interest

6 Taxation of interest where the Non Resident has a Permanent Establishment in India

7 When shall interest be treated as Arising in India

8 Taxation of excess interest paid to related party

9 Article 11(2) - Right of Source State to tax interest

Article - 12 - FTS

1 Introduction to Royalty and Fee for Technical Services

2 What topics are covered in this Course of Royalty and Fee for Technical Services

3 Key Learning objectives of the Presentation

4 Royalty & FTS – Scenario of Taxability in India and Rights of India and Other Contracting State

5 Beneficial Provision of the Treaty or Act - Which one are applicable ?

6 Proof of Tax Residence of Non resident – Section 90(4) & 90(5)

7 Approach to ascertain Tax implications on Royalty & FTS

8 Approach to ascertain Tax implications on Royalty & FTS and ascertaining withholding tax rates

9 Section 9(1) - Charging provisions for taxation of Royalty

10 Imparting of any information Classified as Royalty

11 Royalty and FTS - When do they Arise in India

12 Royalty for Transfer of all or any rights

13 Royalty under Income Tax Act – Types of payments covered

14 Scope of Total Income and Royalty & FTS

15 Tax deductibility of Royalty in hands of Payer

16 Article 12 (1) – India USA Treaty – Right of the state of residence to tax royalty

17 Right to opt for tax rate under the Act for one Contract and under the Treaty for another

18 Article 12(3) - Definition of Royalties

19 Whether both Dry and Wet Lease amount to use of Equipment

20 Lease and Sale of Ship - Which one is Royalty ?

21 Whether payment for use Copyright of literary, artistic or scientific work amounts to Royalty

22 Royalty definition - Comparison of Act, OECD & UN Model

23 Article 12 (4) – India USA Treaty – fee for included services

24 Concept of "Make available" and development and transfer of technical plans and designs

25 Article 12 (5) – India USA Treaty – FIS exclusion

26 Article 12(6) - Royalty and FIS effectively connected to a PE

27 ARTICLE 12(6) - Where do royalty or FTS arise

28 Article 12(8) - Excess Payments to related Enterprise

29 Most Favored Nation Clause (MFN Clause)

Article - 13 - Capital Gains

1 Introduction to Article 13 Capital Gains

2 Objectives of Presentation on Capital Gains

3 Identify which all Capital Assets transfer and taxation are covered under Article 13

4 Which Country has the right to tax Capital Gains ?

5 Approach to be followed to ascertain Taxation of Capital gains - Interaction of the Treaty and Domestic laws provision

6 Meaning of term "Alienation"

7 Existence of PE of Transferor on Capital Gains arising from Alienation of an Asset

8 Applicability of Minimum Alternate Tax (MAT) on Foreign companies deriving capital gains - Indian context

9 Capital gains on transfer of immovable property covered under Article 13(1)

10 Article 13(2) - Transfer of Movable property forming part of the business property of the PE

11 Article 13(3) India – Netherlands – ships or aircraft operating in international traffic

12 Capital gains on transfer of ship

13 Case Study on (a) Sale of shares of Indian company owning immovable property; and (b) Transfer of tenancy rights

14 Article 13(4) - Transfer of shares of a real estate company

15 Article 13(5) - Alienation of any other property

16 Factors not considered to be relevant while applying Article 13(5)

Article - 14 - Independent Personal Services

1 Right of State of Residence to tax income from Independent Personal Services and Exceptions where India can also tax such amount

2 Applicability of Article 14 to Non individuals

3 Payments to Foregin Company in respect of the furnishing the activities of Independent contractor

4 Fiscally transparent partnership – LINKLATERS LLP case and presence of partners in Source State for taxability

5 What is a Fixed Base and its examples

6 Inclusions and exclusions from Article 14

Article - 15 - Dependant Personal Services

1 Introduction to Article 15 and difference with Independent Personal Services - Article 14

2 Provision of the Income Tax Act for Taxation of Salaries paid to Non Resident and Exemptions on salaries earned by a foreign citizen

3 Right of Contracting States to tax employment income - Explanation of Place of exercise

4 Taxation of Stock Option

5 Short Stay exemption - DPS income taxable only in State of Residence

6 Employment exercised aboard a ship or aircraft operating in International Traffic

Article - 16 - Director Fee

1 Article 16 - Taxation of Director's Fees and Other similar payments and distinction vis a vis Article 14 and 15

2 Taxaton of top level managerial remuneration

Article - 17 - Artistes and sportsperson

1 What is covered by Article 17

2 Scope of taxation of an Artiste or Sportsperson

3 Crtierion for services for Article 17

4 Who are covered as a Sportsperson or Entertainer

5 Meaning of "Personal activities" for Article 17

6 Income covered under Article 17 and Allocation of Consolidated Income, into various components

7 Certain issues in connection with Article 17

8 Income of Artiste accruing to a third person

9 Triangular Cases - Application of correct Treaty

10 Computation of Income for Article 17 in Source State - Mechanism

11 Commission to Non resident for arranging Artiste - Whether taxable under Article17

Article - 18 - Pension and other similar remuneration

1 Scope of Article 18 - Pension and other similar remuneration

2 Type of Pensions covered

3 What is covered under Pension and other Similar Remuneration

4 Pension Paid as Consideration for Past employment

5 Non periodical payments for past employment - Article 18(2)

6 Pension paid out of social security system of the State and meaning of annuity

Article - 19 - Government Services

1 What income is covered under Article 19 and Characterstics of Remuneration for Government Services

2 What is meant by Government, State or local authority for the purpose of Article 19

3 Right to tax with Foreign State if services rendered there, recipient is a resident of that State

4 Right to tax with Foreign State if services rendered there, recipient is a resident of that State

Article - 20 - Student

1 Who all are covered under Article 20 - Taxation of Students

2 Conditions to claim exemption for taxation of students under Article 20

3 Resident for the purpose of Article 20 - Meaning of "Resident immedietly before visiting Canada"

4 Income of students from Sources Outside the Host State

5 Taxation & Purpose of visit of student

Article - 21 - Other Income

1 Applicability of Article 21 - Other Income

2 Key characterstics of Other Income Article 21

3 Meaning and coverage of "Dealt with" to ascertain if income is taxable under Other Income

4 Taxability of income as other income when relevant clause absent - Royalty

5 Taxation of Excess royalty payments to related party as Other Income

6 Taxation of other income attributable to the PE of the Non resident in India

7 Right of India to tax Other income which arise in India

Article - 23 - Elimination of Double Taxation

1 Introduction to Article 23 - What is covered

2 Applicability of Article 23 - Losses in State of Residence and taxability of income in hands of two different person

3 Types of Relief from Double Taxation - Unilateral an Bilateral Relief

4 Underlying credit and Tax Sparing

5 Methods of Tax Credit - Exemption and Credit Method

6 Article 25(1) of the India USA Treaty - Credit against the US taxes

8 Article 25 (3) – India USA Treaty – Where does income arise

9 Key controversies issues in claiming Foreign Tax credit

10 How to claim credit for the taxes paid in Foreign country and Triangular Treaty cases

Article - 24 - Non Dicrimination

1 Introduction to Non Discrimination and Types of discrimination under Treaty

2 Article 24(1) - Discrimination based on Nationality

3 Discrimination to a PE

4 Deduction of expenses to an Indian Company - Non Discrimination based on receipient tax status

5 Article 26 (4) – Discrimination based on Indian or Foreign ownership

6 Article 26(5) - PE tax or Limitation on deduction of expenses under Article 7(3) not considered as discrimination

7 Examples of Non Discrimination

Article - 25 - MAP

1What is Mutual Agreement Procedure (MAP) and its applicability in the Treaty context

2 Implementation of MAP under Indian domestic laws

3 Right to file MAP, procedure for MAP application, and interaction vis a vis appealunder Domestic laws

4 Article 27(2) and Article 27(3)

5 Developing appropriate Bilateral and Unilateral procedure for making MAP work -Stay of Demand under India US Treaty

6 Arbitration clause in Treaty under MAP

7 Key issues and challenges for MAP and following application in subsequent years

Article - 26 - Exchange of Information

1 Article 26 - Exchange of Information - Introduction and Obligation to exchangeinformation

2 Key Characterstics of exchange of information

3 Article 28 (1) – Use and Secrecy of information obtained under Exchange of Information under Treaty

4 Article 28 (2) - Frequency of exchange of information by Contracting States

5 Article 28(3) – No obligation of requested state to provide information under request under Article 26

6 Obligation to provide information requested for Requested State

7 Article 28 (5) – Taxes covered under Article 26

8 Decline banking or ownership information under certain circumstances for exchange of information Rules

Article - 27 - Assisstance in Collection of taxes

1 Background of "Assistance in Collection of Taxes"

2 Applicability of Article on Assisstance in Collection of Taxes

3 Revenue claims that a Treaty partner shall Assisst in Collection

4 Article 27(3) – Tax to be collected as if it were own tax of other Contracting State

5 Interim Measures of conservancy for collection of Revenue claim, pending finalisation of enforceability

6 Priority of revenue claim India Poland Treaty - Article 28(6)

7 Proceedings before courts - Article 28(7)

8 Revenue claim ceases to exist - Article 28(8)

9 Non obligation of other Contracting State to recover revenue claims

Article - 28 - Diplomatic Mission

1 Taxation of Members of Diplomatic Mission and Consular Posts

Article - 29 - Entry Into Force

1 Entry into force and process of concluding a Treaty

2 Entry into Force - India US Treaty, Effective date for Treaty and impact on taxation of income of Entry into force

About faculty of " International Taxation - Tax beyond geographical boundaries" By Arinjay Kumar Jain

Mr Arinjay Kumar Jain
Arinjay Kumar Jain Trained over 1500 CA's in International tax till date at Corporates and Consulting Firms. Launching India's first e learning course on International tax in 2016. Created a repository of over 2000 videos for Students under a Not for profit initiative with over 13,500 subscribers on YouTube.Worked on over 750 transaction of Inbound Investment, Outbound Investments, Due diligence, Family Structuring and Succession planning across sectors

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