Therefore, I think it is possible to exempt India from a fixed place of activity. This proposal has yet to be considered as part of the detachment. The term used internationally to describe a foreign taxable presence is a „permanent institution.“ While settlement criteria are difficult to grasp for simple application to all forms of activity, there are elements and definitions in most countries. This guide will examine the traditional approach to settlement, as well as modern developments related to the internet and forms of digital commerce. Therefore, this clause is only attracted if services are provided to an AE, which usually occurs in a typical case of detachment. In addition, the 90-day threshold is reached because MPs are in India for enough time. However, if the services are in the nature of the FTT/FIS, the service PE clause is not attracted; In other words, the first question is whether the payment made under the detachment agreement corresponds to the type of FTT/FIS. If the above answer is positive, then you don`t need to go to the SERVICE PE clause, but if the services are not in the nature of FTS/FIS, then you need to consider the constitution of the PE service. Counsel for Centrica India argued that there was a difference between the term „legal employment“ and „economic employment“. It has been argued that a legal employer appoints someone and therefore has the right to terminate the employment. On the other hand, the economic employer enjoys the fruits of labour, has the power to control and control the risks and results of the work done by the worker. The workplace or work would also be the location run by the economic employer.
The economic employer may not have the right to terminate the employment, it would have the right to terminate the contractual agreement, that is, the secondment agreement. The payment of the detached worker`s salary is billed by the economic employer. On the basis of this differentiation, Centrica India submitted that the overall reading of the detachment agreement conclusively indicated that it was a real and economic employer of the seconded workers and that they were acting according to their dictates in the performance of their work and that they were not placed there to perform the tasks entrusted by overseas companies. Countries in some regions have become aggressive when it comes to PE tax claims against e-commerce companies based on changes in local corporate tax laws or tax treaties. In one case in Spain, a court in that country found that Dell Computer had a „virtual permanent facility“ due to sales in Spain and the use of a Spanish subsidiary to manage its site. This was enough to create a „nexus“ of activity as part of a tax agreement between Spain and Ireland, in which the company had its head office and was located next to the server. When a multinational sends employees and contractors as part of a comprehensive mobility strategy to operations abroad, the question arises when this type of activity will trigger a stable establishment (PE). If the facts of the secondment of senior managers are examined in the test of previous findings, it can be seen that fiscal sustainability is discussed in an assistant/detachment agreement. Such agreements include basic questions about whether certain payments are income, and the possibility of taxation involves an interaction between the EP service article or the article of the FTT. Overall, these agreements fall into the following two categories: is the posting of workers by overseas companies under Article 12 of the DBA-India and Article 13 of the DBA between India and the United Kingdom, which embody the concept of PE service? A stable establishment only leads to the taxation of businesses, so that an individual, such as individual contractors or independent contractors, would generally not meet the criteria.