International Taxation Ready Reckoner

This book is India’s first ‘ready reckoner’ specifically focused on the complexities of international taxation and cross-border transactions. It provides comprehensive coverage of essential topics, including the basic provisions of India’s taxation scheme, the concept of residence, and the crucial role of Double Taxation Avoidance Agreements (DTAA). The book also discusses the interaction between DTAAs and the Income-tax Act, guiding how to read a DTAA, determine eligibility, and resolve conflicts between a DTAA and domestic tax laws.

This handbook is helpful for tax professionals, legal advisors, tax practitioners, tax officers and businesses dealing with cross-border transactions, such as payments to non-residents, transactions involving non-residents, digital transactions, and the withholding tax obligations of residents. The second edition has been updated with the latest amendments from the Finance (No. 2) Act, 2024, and features expanded discussions, additional material, more case studies, and judicial precedents, providing in-depth analysis and practical insights into international taxation.

The Present Publication is the 2nd Edition and has been amended by the Finance (No. 2) Act, 2024. This book has been authored by CA Daksha Baxi & Adv. Surajkumar Shetty, with the following noteworthy features:

[Comprehensive Coverage] Covering a broad spectrum of topics, the book details the basic provisions, residential status, the role and application of Double Taxation Avoidance Agreements (DTAA), and their interaction with the Income-tax Act. It provides a step-by-step guide on how to read a DTAA, determine eligibility, and resolve conflicts between DTAA and the Income-tax Act
[In-depth DTAA Analysis] It examines multiple DTAAs to demonstrate how tax implications can vary across treaties or remain consistent, providing clear explanations for these outcomes. This detailed analysis helps readers understand the nuanced application of DTAAs in various cross-border scenarios
[Detailed Chapter Organisation] The chapters are organised to cover different types of income and transactions, such as rental income, business income, dividends, interest, royalties, technical services, capital gains, employment, and more. This structure brings together all relevant provisions of the Income-tax Act, including appropriate cross-references, making navigation straightforward for users
[Taxability Evaluation] The book provides comprehensive guidance on evaluating the taxability of cross-border transactions using the Income-tax Act, DTAA and references to rules, forms, circulars, and landmark judicial precedents. This holistic approach equips readers to assess tax implications accurately and effectively
[Practical Guidance for Advisors] Throughout the book, notes provide valuable insights into how advisors should approach transactions, the investigations required, and the application of the principles of the Income-tax Act and DTAA. This practical advice helps professionals offer sound, informed guidance on cross-border tax matters
[Simplified Explanations] Complex concepts such as Place of Effective Management (PoEM), Permanent Establishment (PE), and business connections are explained in simple language, supplemented with practical examples and judicial precedents. Relevant statutory texts are reproduced verbatim for easy reference, aiding readers in understanding and applying the law
[Special Focus on Investment Structures] The book discusses the taxation of Foreign Portfolio Investors and various investment funds, including Alternative Investment Funds (AIFs), Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and Securitisation Trusts. It specifically addresses scenarios involving non-resident investors in these structures
[Litigation and Compliance] It provides an overview of provisions related to litigation proceedings under the Income-tax Act, Mutual Agreement Procedures (MAP) under DTAA, the Authority for Advance Rulings (AAR), equalisation levy, transfer pricing provisions, general anti-avoidance rules (GAAR), and special provisions for International Financial Services Centres (IFSC). This comprehensive coverage ensures professionals are well-prepared for compliance and dispute resolution
[Illustrative Case Studies] To enhance practical understanding, the book includes numerous illustrations, practical examples, and comprehensive case studies. These are designed to cover various aspects of cross-border transactions, providing readers with insights into the subtleties and practical challenges involved
The structure and layout of the book is as follows:

[25 Well-structured Chapters] dedicated to a specific area of international taxation, including detailed discussions on relevant provisions and practical guidance
[Cross-references] to other chapters where necessary, ensuring clarity and ease of navigation and enhancing the reader’s ability to understand complex interrelationships within tax laws
[Appendix] includes formats for relevant forms, updates on withholding tax rates, summaries of abbreviations, and comprehensive lists of withholding tax rates under India’s existing DTAAs, serving as a practical toolkit for professionals

The contents of the book are as follows:

Tax System for Non-Residents in India ? An Overview
Tax Treaties
Setting Up a Business in India
Classification of Income
Determining Eligibility to Claim Benefits of DTAA
Taxation of Rental Income
Taxation of Business Income
Taxation of Dividend Income
Taxation of Interest Income
Taxation of Royalty Income
Taxation of Income from Fees for Technical Services
Taxation of Capital Gains
Taxation of Employment Income
Taxation of Non-Resident Indian
Taxation of Foreign Portfolio Investors
Taxation of AIFs, REITs, InvITs, Securitisation Trust
Transactions Attracting Transfer Pricing Regulations
Business Reorganisations
Discontinuance of Business and Dissolution of Indian Company
Foreign Tax Credit
Making Payments to NRs & Obtaining Lower Withholding Certificate
Assessments, Appeals and Dispute Resolution
General Anti-Avoidance Rules
Miscellaneous
Case Study to Determine Taxability of NR, under the IT Act & DTAA