Luxembourg company entitled to India tax treaty benefits due to commercial substance.

The Income Tax Appellate Tribunal (ITAT) ruled that a Luxembourg company is entitled to benefits under the India-Luxembourg tax treaty. Although it is a subsidiary of Cayman Islands entities, the company demonstrated its commercial substance in Luxembourg by providing a valid tax residency certificate, filing tax returns, incurring operational expenses, and making investments outside India. The revenue authorities could not prove it was merely a conduit. Under the Principal Purpose Test of the Multilateral Instrument (MLI), the company's activities and independent existence were sufficient to justify treaty benefits, leading the ITAT to direct that these benefits be granted. .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X