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Practice area · International Tax

Cross-border tax, treaty in hand.

One misread treaty article or a missed PE can double the tax on a cross-border deal. Get the position under the Act and the applicable DTAA, cited to source.

International tax covers the cross-border taxation of income - treaty relief, permanent establishment, withholding and anti-avoidance. AskSolique answers international-tax questions with the exact treaty article, section and authority cited.

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International-tax questions sit at the intersection of the Act, the treaty and the MLI - the area where a single missed article changes the whole outcome.

Why International Tax is hard

The Act, the treaty and the MLI - read as one.

International tax requires reading the Income-tax Act, the specific DTAA and the Multilateral Instrument together, and applying whichever is more beneficial - for each stream of income, each treaty partner, each fact pattern. Permanent-establishment tests differ article to article; withholding on royalties and FTS turns on both Sec 115A and the treaty rate; GAAR and the MLI's principal-purpose test can override treaty benefits. Each treaty is worded slightly differently, so an answer that is right for one country is wrong for the next - and no single document holds the whole position.

What's broken in the way you work today

You feel this on every inbound and outbound payment.

  1. Every treaty is worded differently

    The PE clause or royalty definition in one DTAA differs from the next. A position lifted from the wrong treaty is confidently, invisibly wrong.

  2. General AI ignores the MLI

    Ask a chatbot about treaty relief and it applies a headline rate without testing the MLI's principal-purpose rule or GAAR - the tests that can deny the benefit.

  3. PE exposure hides in the facts

    Whether a visit or a project creates a PE turns on days, roles and the specific treaty article. Getting it wrong exposes the foreign entity to Indian tax on attributable profits.

  4. The paperwork gates the relief

    A TRC and Form 10F are conditions for treaty relief. Advise the relief without flagging the documentation and the benefit fails at withholding.

What happens if nothing changes

A missed treaty article changes the whole bill.

In cross-border tax, the exposure is large and two-sided. Under-withholding on a payment to a non-resident makes the payer liable for the tax plus interest and disallows the expense; a missed permanent establishment brings the foreign entity's attributable profits into the Indian net with penalty; a treaty benefit claimed without surviving GAAR or the MLI is reversed on assessment. Doing nothing means advising on high-value cross-border flows from the Act or a single treaty alone, on positions where one unread article changes the outcome entirely.

What has to change

The Act, the treaty article and the anti-avoidance test - together.

Stop reasoning from the Act alone or a half-remembered treaty. The international-tax position should arrive with the governing section, the specific DTAA article, the MLI and GAAR overlay, and the documentation the relief requires - from a corpus maintained as treaties and guidance move - and it should connect to the transfer-pricing and FEMA angles of the same transaction, because a cross-border payment never sits inside one law.

Genuine use cases

The questions that land on an international-tax desk - answered, cited.

Real fact patterns from cross-border tax work. Each returns the position with the exact section and treaty article attached.

PE exposure from a project visit

A foreign company sends employees to India for a project and needs to know if it creates a taxable presence.

The question

Does a foreign company have a PE if its employees visit India for a project?

AskSolique answers

A service PE or fixed-place PE can arise depending on the duration of presence and the specific treaty's PE article - the days and the nature of the activity must be tested against the applicable DTAA before concluding, as thresholds differ treaty to treaty.

  • ↳ Art 5, applicable DTAA
  • ↳ Sec 9(1)(i), IT Act

Withholding on a royalty payment

An Indian company pays royalties to a non-resident and needs the correct withholding rate.

The question

What is the withholding rate on royalties paid to a non-resident?

AskSolique answers

Royalties and fees for technical services are taxed under Sec 115A or the beneficial DTAA rate, whichever is lower, with the treaty rate available only where the recipient furnishes a Tax Residency Certificate and Form 10F.

  • ↳ Sec 115A, IT Act
  • ↳ Royalty article, DTAA

Treaty relief and anti-avoidance

A non-resident wants to claim a treaty benefit on an India-sourced gain, and the structure needs testing.

The question

Can GAAR or the MLI deny a treaty benefit?

AskSolique answers

Yes - GAAR can override a treaty benefit where the arrangement is an impermissible avoidance arrangement, and the MLI's principal-purpose test can deny relief where obtaining the benefit was a principal purpose, each subject to the applicable safeguards.

  • ↳ GAAR, Chapter X-A
  • ↳ MLI principal-purpose test

What your team gets out of it

Not a discount on hours - leverage on the highest-stakes work you do.

  • Apply the right treaty

    Every position is read against the specific DTAA article, not a generic rate - so the answer holds for that country.

  • See the anti-avoidance overlay

    Answers flag GAAR and the MLI where they bite, so a treaty benefit is not claimed only to be reversed.

  • Gate the relief correctly

    The TRC and Form 10F conditions surface with the position, so relief does not fail at withholding.

  • Defensible on assessment

    Every conclusion traces to the section, article and authority - the position you can defend on a cross-border matter.

Frequently asked International Tax questions

How does treaty relief work for a non-resident?
A non-resident can apply the more beneficial of the Act or the applicable DTAA, subject to furnishing a Tax Residency Certificate and Form 10F.
What creates a permanent establishment?
A fixed place of business, a dependent agent, or (in some treaties) services rendered beyond a threshold period can each create a PE.
What is the withholding rate on royalties to non-residents?
Royalties and FTS are taxed under Sec 115A or the beneficial DTAA rate, whichever is lower, with the treaty rate needing a TRC.
Does GAAR apply to treaty benefits?
GAAR can override treaty benefits where an arrangement is an impermissible avoidance arrangement, subject to the statutory safeguards.

A cited answer, in context

Put an international-tax question of your own to it.

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Example question

Does a foreign company have a PE if its employees visit India for a project?

AskSolique answers

A service PE or fixed-place PE can arise depending on duration and the treaty's PE article - count the days and test against the specific DTAA before concluding.

  • ↳ Art 5, India–UK DTAA
  • ↳ Sec 9(1)(i), IT Act
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