The Indian tax authority has published for public comments a draft Notification, which will implement the OECD’s proposals under Action 5 of the base erosion and profit shifting (BEPS) project.
According to BEPS Action 5, exchange of rulings on permanent establishment is required not only with the countries of residence of all related parties with whom the taxpayer enters into a transaction, but also with the country of residence of the immediate parent company and the ultimate parent company.
The draft Notification, released on April 14, would implement the recommendations made under BEPS Action 5 and would bring greater transparency in cross-border transactions.
In particular, Form 34C and 34D (Forms for Advance Rulings) would be modified so that details such as name, address, and country of the residence of non-resident’s immediate parent company or ultimate parent company are captured at the application stage itself.
Comments on the draft Notification must be received by April 30.