International Tax – Royalty and Fee for Technical Services

Learn how to interpret Article 12 - Royalty and Fee for Technical Services, Right of Source and Residence State to tax

Created by: Arinjay Kumar Jain
International , M&A Tax Expert - Ex - Director at KPMG India

What Will I Learn?

• Understand which payments amount to Royalty and Fee for Technical Services
• Identify the Rights of Source State (India) and State of Residence to tax Royalty and Fee for Technical Services
• Apply steps to be followed to ascertain Tax implications on Royalty and Fee for Technical Services and ascertaining withholding tax rates in Source State (India)
• Know the conditions applicable to claim Treaty benefits – Test of beneficial ownership and proof of Residence
• Understand when Royalty and Fee for Technical Services Arise in India under local laws/ Applicable Treaty
• Comparison of Royalty under the Indian Income Tax Act, OECD & UN Model
• Classify various payments into Royalty/ Fee for technical Services, including – a. Payment for Imparting of information b. Transfer of all or any rights c. Copyright of literary, artistic or scientific work d. Dry and Wet Lease amount to use of Equipment
• Ascertain the Tax deductibility in hands of Payer of Royalty in Source State
• Understand the meaning/exclusions of Fee for technical (Included) Services under India USA Treaty
• When would Fee for technical Services be considered as “Make available”
• Taxation of Royalty and for technical Services effectively connected to a PE
• How would the tax apply to excess payments of Royalty and Fee for technical Services to related Enterprise
• Impact of Most Favored Nation Clause (MFN Clause) on taxation of Royalty and Fee for technical Services

Requirements

• Basic knowledge of local tax laws and applicability of International tax Treaties.

Target audience

• This Course on International Tax is meant for individuals who want to make a career in International Tax. This provides the Rules of taxation of Royalty and Fee For Technical services with reference to the Indian Domestic Tax laws and the tax Treaty between India and USA, with suitable explanation for difference in other Treaties. While the Rules for Interpretation shall equally apply to other similar Treaties that are globally entered by various countries, this course would not contain reference to the local laws of country other than India and hence this aspect should be considered by students opting for this course.