5. The General Court also clarified that a distinction was made between a commercial relationship and a permanent establishment. The latter is intended to determine the income of a non-resident under a double taxation convention, while the former is intended for the application of the Income Tax Act. With regard to offshore services, the Tribunal found that a sufficient territorial link between the provision of services and the territorial borders of India was necessary to make the income taxable. The whole treaty would not be due to activities in India. The measure of residence, as applied in international law, is that of the taxpayer and not of the recipient of those services. 4) National website of the Income Tax Division of India-www.incometaxindia.gov.in/ The process of applying a double taxation treaty can be divided into a series of steps including the different types of provisions. The UN model gives more weight to the source principle than to the residency principle of the OECD model. In accordance with the principle of withholding tax, the articles of the model agreement assume that the source country recognizes that: (a) the taxation of foreign capital income takes into account the expenses attributable to income from income, so that such income is taxed net; (b) that taxation would not be high enough to discourage investment and (c) that it would take into account the adequacy of the distribution of revenues with the country providing the capital. In addition, the UN Model Convention embodies the idea that it would be appropriate for the country of residence to extend a double taxation exemption measure, either through foreign tax credits or exemptions, as in the OECD Model Convention. Double taxation treaties are classified under headings 6 following.
Apply the material article: Substantive articles generally have one of three forms Double taxation conventions (also known as double taxation conventions or « DBA ») are negotiated in international law and are subject to the principles of the Vienna Convention on the Law of Treaties. . . .