Amy's International tax

  Questions1:   Please elaborate on the 'Caveat' added to the US-India tax treaty in the Excel file in cell D12 . We need specific guidance on the application of the Arm's Length Principle (ALP) when the US entity's branch in Singaporean (SG) /Australian(AU) personnel provide field services in India, and the Indian entity (IN) invoices the customer directly, including how to characterize the intercompany charge and related intercompany markups. Response: Caveat was added to bring to your attention that as per US treaty irrespective of number of days the activities are carried out in India, a Service PE may be constituted when the services (other than included services as defined in Article 12) are provided by an AE. The US treaty applies in the case of Australia or Singapore Branch (explained in the Question #1 of the word document. As per the US treaty irrespective of number of stays in India, a Service PE may be constituted in the case of transaction between...

 Papua New Guinea: Likely (A) if a US treaty with an Article 7 equivalent is in force and applicable, otherwise (B) if taxed on a net basis under domestic law. The specific tax treatment under domestic law, including the application of foreign contractor withholding tax, needs careful consideration. Okay, let's break down that specific point about Papua New Guinea and why there's a nuance between options (A) and (B). First, recall the definitions of the two options: (A): An applicable Tax Treaty is in force. The place of business is a Permanent Establishment (PE) according to that treaty. The foreign country taxes the income attributable to the PE on a net basis , similar to OECD Model Article 7 . (B): No applicable Tax Treaty is in force. The foreign country taxes a place of business under its domestic law on a net basis , similar to how it taxes its own tax residents. Now, consider the situation in Papua New Guinea based on what we've found: Tax Treaties: Papu...

Timor-Leste  https://taxsummaries.pwc.com/timor-leste/corporate/corporate-residence The definition of a corporate resident (resident legal person) covers a wide range of entities, such as companies, partnerships, trusts, governmental institutions, and unincorporated associations incorporated, formed, organised, or established in Timor-Leste. Permanent establishment (PE) A PE is defined as a fixed place of business through which the business of a person is wholly or partly carried on, including: A place of management. A branch. A representative office. An office. A factory. A workshop. A mine, an oil or gas well, a quarry, or any other place of extraction of natural resources, including any place of drilling for mineral exploration. A fishery, place where animal husbandry is conducted, farm, plantation, or forest. A construction, installation, or assembly project. The furnishing of a service through employees or other personnel if conducted for more than 60 days in any 12-month peri...