RECENT IMPORTANT DEVELOPMENTS – PART I

In this issue we are covering recent major developments in the field of
International Taxation and the work being done at OECD in various other related
fields. It is in continuation of our endeavour to update readers on major
International Tax developments at regular intervals. The items included here
are sourced from press releases of the Ministry of Finance and CBDT
communications.

DEVELOPMENTS IN INDIA
RELATING TO INTERNATIONAL TAX

(I) CBDT’s proposal for amendment of Rules
for Profit Attribution to Permanent Establishment

The CBDT vide its communication dated 18^th
April, 2019 released a detailed, 86-page document containing a proposal for
amendment of the Rules for Profit Attribution to Permanent Establishment, for
public comments within 30 days of its publication. The CBDT Committee suggested
a ‘three-factor’ method to attribute profits, with equal weight to (a) sales,
(b) manpower, and (c) assets. The Committee justifies the three-factor approach
as a mix of both demand and supply side that allocates profits between the
jurisdictions where sales takes place and the jurisdictions where supply is
undertaken. The CBDT Committee has recommended far-reaching changes to the
current scheme of attribution of profits to permanent establishments.

The report outlines the formula for
calculating “profits attributable to operations in India”, giving weightage to
sales revenue, employees, wages paid and assets deployed.

The relevant portion of the ‘Report on
Profit Attribution to Permanent Establishments’ containing the
Committee’s conclusions and recommendations in paragraphs 179 to 200 is given
below for ready reference:

“Conclusions and
recommendations of the Committee

179.   After detailed analysis of the issues related to attribution of
profits, existing rules, their legal history, the economic and public policy
principles relevant to it, the international practices, views of academicians
and experts, relevant case laws and the methodology adopted by tax authorities
dealing with these issues, Committee concluded its observations, which are
summarised in following paragraphs.

11.1 Summary of Committee’s
observations and conclusions

180.   The business profits of a non-resident enterprise is subjected to
the income-tax in India only if it satisfies the threshold condition of having
a business connection in India, in which case, profits that are derived from
India from its various operations including production and sales are taxable in
India, either on the basis of the accounts of its business in India or where
they cannot be accurately derived from its accounts, by application of Rule 10,
which provides a wide discretion to the Assessing Officer. Where a tax treaty
entered by the Central government is applicable, its provisions also need to be
satisfied for such taxation. As per Article 7 of UN model tax convention (which
is usually followed in most Indian tax treaties, sometimes with variations),
only those profits of an enterprise can be subjected to tax in India which are
attributed to its PE in India, and would include profits that the PE would be
expected to make as a separate and independent entity. Under the force of
attraction rules, when applicable, it would include profits from sales of same
goods as those sold by the PE that are derived from India without participation
of PE. Profits attributable to PE can be computed either by a direct accounting
method provided in paragraph 2 or by an indirect apportionment method provided
in paragraph 4 of Article 7.

181.   An analysis of Article 7 and its legal history shows that there
are three standard versions. The Article 7 which exists in UN model tax
convention is similar to the Article 7 as it existed in the OECD model
convention prior to 2010, except that the UN model tax convention allows the
application of force of attraction rules and restricts deduction of certain
expenses payable to the head office by the PE. This Article in the OECD model
convention was revised in 2010. Under the revised article the profits
attributable to the PE are required to be determined taking into account the
functions, assets and risk, and the option of determining them by way of
apportionment has been excluded.

182.   One of the primary implications of the 2010 revision of Article 7
by OECD was that in cases where business profits could not be readily
determined on the basis of accounts, the same were required to be determined by
taking into account function, assets and risk, completely ignoring the sales
receipts derived from that tax jurisdiction. This amounts to a major deviation,
not only from the rules universally accepted till then, but also from the
generally applicable accounting standards for determining business profits,
where business profits cannot be determined without taking sales into account.

183.   Economic analysis of factors that affect and contribute to
business profits makes it apparent that profits are contributed by both demand
and supply of the goods. Accordingly, a jurisdiction that contributes to the
profits of an enterprise either by facilitating the demand for goods or
facilitating their supply would be reasonably justified in taxing such profits.
The dangers of double taxation of such profits can be eliminated by tax
treaties. If taxes collected facilitate economic growth in that jurisdiction,
the demand for goods rises, which in turn also benefits the tax-paying
enterprise, resulting in a virtuous cycle that benefits all stakeholders. On
the contrary, if the jurisdiction is unable to collect tax from the
non-resident suppliers, it would be forced to collect all the taxes required
from the domestic tax-payers, which in turn would reduce the ability of
consumers to pay, reduce their competitiveness, hurt economic growth and the
aggregate demand, resulting in a vicious cycle, which will adversely affect all
stakeholders, including the foreign enterprises doing business therein.

184.   Broadly, possible approaches for profit attribution can be summed
in three categories – (i) supply approach allocates profits exclusively to the
jurisdiction where supply chain and activities are located; (ii) demand
approach allocates profits exclusively to the market jurisdiction where sales
take place; (iii) mixed approach allocates profits partly to the jurisdiction
where the consumers are located and partly to the jurisdiction where supply
activities are undertaken.

185.   The mixed approach appears to have been most commonly adopted in
international practices, though in some cases demand approach has also been
favoured. In contrast, supply side does not appear to have been adopted
anywhere, except in the 2010 revision of Article 7 of the OECD model
convention, which requires determination of profits without taking sales into
account. As a consequence, the contribution of demand to profits is completely
ignored.

186.   A purview (sic) of academic literature and views suggests a
wide acceptance in theory that demand, as represented by sales, can be a valid
ground for attribution of profits. There also exists a diversity of views among
academicians and experts on the validity of the revised OECD approach for
profit attribution contained in the AOA. A number of international authors
disagree with it and many have been critical of this approach.

187.   The AOA approach can have significant adverse consequences for
developing economies like India, which are primarily importers of capital and
technology. It restricts the taxing rights of the jurisdiction that contributes
to business profits by facilitating demand, and thereby has the potential to
break the virtuous cycle of taxation that benefits all stakeholders. Instead,
it can set a vicious cycle in place that can harm all stakeholders.

188.   The lack of sufficient justification or rationale and its
potential adverse consequences fully justify India’s strongly-worded position
on revised Article 7 of OECD model convention, wherein India has not only found
it unacceptable for adoption in Indian tax treaties, but also rejected the
approach taken therein. This view of India, that since business profits are
dependent on sale revenues and costs, and since sale revenues depend on both
demand and supply, it is not appropriate to attribute profits exclusively on
the basis of function, assets and risks (FAR) alone, has been communicated and
shared with other countries consistently and on a regular basis.

189.   Since, the revised Article 7 of OECD model tax convention has not
been incorporated in any of the Indian tax treaties, the question of AOA being
applicable on Indian treaties or profit attributed therein cannot arise. For
the same reason, additional guidance issued by OECD with reference to AOA in
respect of the changes in Article 5 introduced by the Action 7 of the BEPS
project on Artificial Avoidance of PE Status, also does not have any relevance
to Indian tax treaties. This, however, means that India cannot depend on OECD
guidance and gives rise to a need for India to consider ways and means for
bringing greater clarity and objectivity in profit attribution under its tax
treaties and domestic laws, especially in consequence to the changes introduced
as a result of Action 7.

190.   An analysis of case laws indicates that the courts have upheld the
application of Rule 10 for attribution of profits under Indian tax treaties. In
several such cases, the right of India to attribute profits by apportionment,
as permissible under Indian tax treaties, has also been upheld by the courts.
The judicial authorities do not appear to have insisted on a universal and
consistent method. They have also upheld the wide discretion in the hands of
the Assessing Officer under Rule 10 of the Rules, but corrected or modified his
approach for the purpose of ensuring justice in particular cases. Thus, diverse
methods of attributing profits by apportionment under Rule 10 of the Rules are
in existence. In the view of the Committee, the lack of a universal rule can
give rise to tax uncertainty and unpredictability, as well as tax disputes.
Thus, there seems to be a case for providing a uniform rule for apportionment
of profits to bring in greater certainty and predictability among taxpayers and
avoid resultant tax litigation.

191.   A detailed analysis of methods adopted by tax authorities for
attributing profits in recent years also highlights similar diversity in the
methods adopted by assessing officers for attribution of profits, which
reaffirms the need to consider possible options that can be consistently
adopted as an objective method of profits attribution under Rule 10 of the
Rules, and bring greater clarity, predictability and objectivity in this
exercise. Any options considered for this purpose must be in accordance with
India’s official position and views and must address its concerns.

192.   Accordingly, the Committee considered some
options based on the mixed or balanced approach that allocates profits between
the jurisdiction where sales take place and the jurisdiction where supply is
undertaken. The Committee did not find the option of formulary apportionment
method apportioning consolidated global profits feasible, in view of the
practical constraints in obtaining information related to jurisdictions outside
India. Thus, the Committee considers that it may be preferable to adopt a
method that focuses on Indian operations primarily and derives profits applying
the global profitability, with necessary safeguards to prevent excessive
attribution on the one hand and protect the interests of Indian revenue on the
other.

193.   The Committee found the option of Fractional
Apportionment based on apportionment of profits derived from India permissible
under Indian tax treaties as well as Rule 10, and relatively feasible as it is
based largely on information related to Indian operations. Out of various
possible options of apportioning profits by a mixed approach, the Committee
found considerable merit in the three-factor method based on equal weight
accorded to sales (representing demand) and manpower and assets (representing
supply, including marketing activities).

194.   After taking into account the principle laid down by the Hon’ble
Supreme Court in the case of DIT vs. Morgan Stanley, and the need to avoid
double taxation of profits from Indian operations in the hands of a PE, which
is primarily brought into existence either by the presence of an Indian
subsidiary carrying on parts of an integrated business, whose profits are
separately taxed in its hands in India, the Committee found it justifiable that
the profits derived from Indian operations that have already been subjected to
tax in India in the hands of a subsidiary should be deducted from the
apportioned profits. The Committee observed that in a case where no sales takes
place in India, and the profits that can be apportioned to the supply
activities are already taxed in the hands of an Indian subsidiary, there may be
no further taxes payable by the enterprise.

195.   In this option, in order to ensure objectivity and certainty,
profits derived from India need to be defined objectively. The Committee considers
that the same can be arrived at by multiplying the revenue derived from India
with global operational profit margin [in order to avoid any doubt the global
operational profit margin is the EBITDA margin (earnings before interest,
taxes, depreciation and amortization) of a company]. However, the Committee
also noted the need to protect India’s revenue interests in cases where an
enterprise having global losses or a global profit margin of less than 2%,
continues with the Indian operations, which could be more profitable than its
operations elsewhere. In the view of the Committee, the continuation of Indian
operations justifies the presumption of higher profitability of Indian
operations, and in such cases a deeming provision that deems profits of Indian
operations at 2% of revenue or turnover derived from India should be
introduced.

196.   After taking into account the developments in taxation of digital
economy and the new Explanation 2A, inserted by the Finance Act, 2018,
explicitly including significant economic presence within the definition of
business connection, the Committee considered it necessary to take into account
the role and relevance of users in contributing to the business profits of
multi-dimensional business enterprises. Users can be a substitute to either
assets or employees and supplement their role in contributing to profits of the
enterprise.

197.   After considering various aspects of users’ contribution, the
Committee came to the conclusion that user data and activities contribute to
the profits of the multi-dimensional enterprises and there is a strong case of
taking them into account, per se, as a factor in apportionment of profits
derived from India by enterprises conducting business through multi-dimensional
business models where users are considered crucial to the business. The
Committee concluded that for such enterprises, users should also be taken into
account for the purpose of attribution of profits, as the fourth factor for
apportionment, in addition to the other three factors of sales, manpower and
assets.

198.   Although a recent amendment of the 2016 proposal for CCCTB has
proposed assigning a weight to the users that is equal to the other three
factors of sales, manpower and assets, the Committee found it preferable to assign
a relatively lower weight of 10% to users in low and medium user intensity
models and 20% in high user intensity models at this stage, with the
corresponding reduction in the weightage of employees and assets except for
sales being assigned 30% weight in apportionment in both the fact patterns.
Given the rapid expansion of digital economy and the ongoing developments
related to rules governing its taxation, it may be necessary to monitor the
role of users and their contribution to profits in future and accordingly
assess the need for considering a review of the weight assigned to users in
subsequent years.

11.2 Recommendations

199.   In view of the above, the Committee makes the following
recommendations:

(i)   Rule 10 may be amended to provide that in the case of an assessee
who is not a resident of India, has a business connection in India and derives
sales revenue from India by a business all the operations of which are not
carried out in India, the income from such business that is attributable to the
operations carried out in India and deemed to accrue or arise in India under
clause (i) of sub-section(1) of section 9 of the Act, shall be determined by
apportioning the profits derived from India by three equally weighted factors
of sales, employees (manpower and wages) and assets, as under:

Profits attributable to
operations in India =

‘Profits derived from
India’ (“Profits derived from India” = Revenue derived from India x Global
operational profit margin as referred in paragraph 159.) x [SI/3xST + (NI/6xNT)
+(WI/6xWT) + (AI/3xAT)]

Where,

SI = sales revenue derived
by Indian operations from sales in India

ST = total sales revenue
derived by Indian operations from sales in India and outside India

NI =number of employees
employed with respect to Indian operations and located in India

NT = total number of
employees employed with respect to Indian operations and located in India and
outside India

WI = wages paid to
employees employed with respect to Indian operations and located in India

WT = total wages paid to
employees employed with respect to Indian operations and located in India and
outside India

AI = assets deployed for
Indian operations and located in India

AT = total assets deployed
for Indian operations and located in India and outside India

(ii)  The amended rules should provide that ‘profits derived from Indian
operations’ will be the higher of the following amounts:

a. The amount arrived at by
multiplying the revenue derived from India x Global operational profit margin,
or

b. Two percent of the
revenue derived from India

(iii) The amended rules should provide an exception
for enterprises in case of which the business connection is primarily
constituted by the existence of users beyond the prescribed threshold, or in
case of which users in excess of such prescribed threshold exist in India. In
such cases, the income from such business that is attributable to the
operations carried out in India and deemed to accrue or arise in India under
clause (i) of sub-section (1) of section 9 of the Act, shall be determined by
apportioning the profits derived from India on the basis of four factors of
sales, employees (manpower and wages), assets and users. The users should be
assigned a weight of 10% in cases of low and medium user intensity, while each
of the other three factors should be assigned a weight of 30%, as under:

Profits attributable to
operations in India in cases of low and medium user intensity business models =

‘Profits derived from
India’ x [0.3 x SI/ST + (0.15 x NI/NT) + (0.15 x WI/WT) + (0.3 x AI/3xAT)] +
0.1]

In case of digital models
with high user intensity, the users should be assigned a weight of 20%, while
the share of assets and employees be reduced to 25% each after keeping the
weight of sales as 30% as under:

Profits attributable to
operations in India in cases of high user intensity business models =

‘Profits derived from
India’ x [0.3 x SI/ST + (0.125 x NI/NT) + (0.125 x WI/WT) + (0.25 AI/3xAT)] +
0.2]

(iv) The amended rules should also provide that where the business
connection of the enterprise in India is constituted by the activities of an
associate enterprise that is resident in India and the enterprise does not
receive any payments on accounts of sales or services from any person who is
resident in India (or such payments do not exceed an amount of Rs. 10,00,000)
and the activities of that associated enterprise have been fully remunerated by
the enterprise by an arm’s length price, no further profits will be
attributable to the operation of that enterprise in India.

(v) However, where the
business connection of the enterprise in India is constituted by the activities
of an associate enterprise that is resident in India and the payments received
by that enterprise on account of sales or services from persons resident in
India exceeds the amount of Rs. 10,00,000 then profits attributable to the
operation of that enterprise in India will be derived by apportionment using
the three factors or four factors as may be applicable in his case and
deducting from the same the profits that have already been subjected to tax in
the hands of the associated enterprise. For this purpose, the employees and
assets of the associated enterprise will be deemed to be employed or deployed
in the Indian operations and located in India.

200.   The Committee recommends the amendment of Rule
10 accordingly. The Committee also recommended that an alternative can be
amendment of the IT Act itself to incorporate a provision for profit
attribution to a PE.”

The Bombay Chartered Accountants’ Society has also given its comments and
suggestions in this regard. The final rules based on the public comments
received are awaited.

(II)    Finance Minister N. Sitharaman bats for
‘SEP’-based solution to vexed digitalisation issue at G-20 meet (Source:
Press Release of Ministry of Finance dated 9^th June, 2019)

The Union Minister for Finance and Corporate
Affairs, Mrs. Nirmala Sitharaman, attended the G-20 Finance Ministers’ and
Central Bank Governors’ meeting and associated events and programmes on 8^th
and 9^th June, 2019 at Fukuoka, Japan. She was accompanied by Mr. Subhash C. Garg, Finance Secretary and Secretary,
Economic Affairs, Dr. Viral Acharya, Deputy Governor of the RBI, and other
officers.

Mrs. Sitharaman flagged serious issues
related to taxation and digital economy companies and to curb tax avoidance and
evasion. She highlighted the issue of economic offenders fleeing legal
jurisdictions and called for cohesive action against them.

The Finance Minister noted the urgency to fix
the issue of determining the right nexus and profit allocation solution for
taxing the profits made by digital economy companies. Appreciating the
significant progress made under the taxation agenda, including the Base Erosion
and Profit Shifting (BEPS), tax challenges from digital economy and exchange of
information under the aegis of G-20, she congratulated the Japanese Presidency
for successfully carrying these tasks forward.

She noted that the work on tax challenges
arising from the digitalisation of economy is entering a critical phase with an
update to the G-20 due next year. In this respect, Mrs. Sitharaman strongly
supported the potential solution based on the concept of ‘significant economic
presence’ of businesses taking into account the evidence of their purposeful
and sustained interaction with the economy of a country. This concept has
been piloted by India and supported by a large number of countries, including
the G-24. She expressed confidence that a consensus-based global solution,
which should also be equitable and simple, would be reached by 2020.

Welcoming the commencement of automatic
exchange of financial account information (AEOI) on a global basis with almost
90 jurisdictions successfully exchanging information in 2018, the Finance
Minister said this would ensure that tax evaders could no longer hide their
offshore financial accounts from the tax administration. She urged the G-20 /
Global Forum to further expand the network of automatic exchanges by
identifying jurisdictions, including developing countries and financial centres
that are relevant but have not yet committed to any timeline. Appropriate
action needs to be taken against non-compliant jurisdictions. In this respect,
she called upon the international community to agree on a toolkit of defensive
measures which can be taken against such non-compliant jurisdictions.

Earlier, she participated in the Ministerial
Symposium on International Taxation and spoke in the session on the ongoing
global efforts to counter tax avoidance and evasion. During the session, she
also dwelt on the tax challenges for addressing digitalisation of the economy
and emphasised that nexus was important. Mrs. Sitharaman also raised the need
for international co-operation on dealing with fugitive economic offenders who
flee their countries to escape from the consequences of law. She also
highlighted the fugitive economic offenders’ law passed by India which provides
for denial of access to courts until the fugitive returns to the country. This
law also provides for confiscation of their properties and selling them off.

She drew attention to the practice permitted
by many jurisdictions which allow economic offenders to use investment-based
schemes to obtain residence or citizenship to escape from legal consequences
and underlined the need to deal with such practices. She urged that closer
collaboration and coordinated action were required to bring such economic
offenders to face the law.

India’s Finance Minister highlighted the need
for the G-20 to keep a close watch on global current account imbalances to
ensure that they do not result in excessive global volatility and tensions. The
global imbalances had a detrimental effect on the growth of emerging markets.
Unilateral actions taken by some advanced economies adversely affect the
exports and the inward flow of investments in these economies. She wondered if
the accumulation of cash reserves by large companies indicated the reluctance
of these companies to increase investments. This reluctance could have adverse
implications on growth and investments and possibly leading to concentration of
market power. She also urged the G-20 to remain cognizant of fluctuations in
the international oil market and study measures that can bring benefits to both
the oil-exporting and importing countries.

In a session on infrastructure investment,
Mrs. Sitharaman emphasised on the importance of making investments in
cost-effective and disaster resilient infrastructure for growth and
development. She suggested the G-20 focus on identifying constraints to flow of
resources into the infrastructure sector in the developing world and solutions
for overcoming them. She also took note of the close collaboration of India,
Japan and other like-minded countries, aligned with the Sendai Framework, in
developing a roadmap to create a global Coalition on Disaster Resilient
Infrastructure.

The Japanese Presidency’s priority issue of
ageing was also discussed. Mrs. Sitharaman highlighted that closer
collaboration between countries with a high old-age dependency ratio and those
with a low old-age dependency ratio was necessary for dealing with the policy
challenges posed by ageing. She suggested that if ageing countries with
shrinking labour force allow calibrated mobility of labour with portable social
security benefits, the recipient countries can not only take care of the aged
but also have a positive effect on global growth. She said that India’s
demography presented a dual policy challenge since India’s old-age dependency
ratio is less than that of Japan, while at the same time India’s aged
population in absolute numbers exceeds that of Japan. She detailed the policy
measures that the Government of India is taking to address these challenges.

While speaking on the priority of Japanese
Presidency on financing of universal health coverage (UHC), she emphasised the
importance of a holistic approach which encompasses the plurality of pathways
to achieve UHC, including through traditional and complementary systems of
medicine.

(III) Ratification of the
Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent
Base Erosion and Profit Sharing (Source: Press Release of the Ministry of
Finance dated 12^th June, 2019)

Text of the Press Release
of the Ministry of Finance dated 12^th June, 2019:

“Ratification of the
Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent
Base Erosion and Profit Shifting.

The Union Cabinet, chaired
by the Prime Minister, Mr. Narendra Modi, has approved the ratification of
the Multilateral Convention to Implement Tax Treaty-Related Measures to
Prevent Base Erosion and Profit Shifting (MLI).

IMPACT

The Convention will modify India’s treaties
in order to curb revenue loss through treaty abuse and base erosion and profit
shifting strategies by ensuring that profits are taxed where substantive
economic activities generating the profits are carried out and where value is
created.

DETAILS

i. India has ratified the
Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent
Base Erosion and Profit Shifting, which was signed by the Hon’ble Finance
Minister, Mr. Arun Jaitley, at Paris on 7^th June, 2017 on behalf of
India;

ii.   The Multilateral Convention is an outcome of the OECD / G-20
Project to tackle Base Erosion and Profit Shifting (the “BEPS
Project”) i.e., tax planning strategies that exploit gaps and mismatches
in tax rules to artificially shift profits to low or no-tax locations where
there is little or no economic activity, resulting in little or no tax being
paid. The BEPS Project identified 15 actions to address base erosion and profit
shifting (BEPS) in a comprehensive manner;

iii.  India was part of the ad hoc group of more than 100 countries
and jurisdictions from G-20, OECD, BEPS associates and other interested
countries which worked on an equal footing on the finalisation of the text of
the Multilateral Convention, starting May, 2015. The text of the Convention and
the accompanying Explanatory Statement was adopted by the ad hoc Group on 24^th
November, 2016;

iv.  The Convention enables all
signatories, inter alia, to meet treaty-related minimum
standards that were agreed as part of the final BEPS package, including the
minimum standard for the prevention of treaty abuse under Action 6;

v. The Convention will
operate to modify tax treaties between two or more parties to the Convention. It
will not function in the same way as an amending protocol to a single existing
treaty, which would directly amend the text of the Covered Tax Agreement. Instead,
it will be applied alongside existing tax treaties, modifying their application
in order to implement the BEPS measures;

vi.  The Convention will modify India’s treaties in order to curb
revenue loss through treaty abuse and base erosion and profit shifting
strategies by ensuring that profits are taxed where substantive economic
activities generating the profits are carried out and where value is created.

BACKGROUND

The Convention is one of
the outcomes of the OECD / G-20 project, of which India is a member, to tackle
base erosion and profit shifting. The Convention enables countries to implement
the tax treaty-related changes to achieve anti-abuse BEPS outcomes through the
multilateral route without the need to bilaterally re-negotiate each such
agreement which is burdensome and time-consuming. It ensures consistency and
certainty in the implementation of the BEPS Project in a multilateral context.
Ratification of the multilateral Convention will enable application of BEPS
outcomes through modification of existing tax treaties of India in a swift
manner.

The Cabinet Note seeking
ratification of the MLI was sent to the Cabinet on 16^th April, 2019
for consideration. Since the said Note for Cabinet could not be taken up in the
Cabinet due to urgency, the Hon’ble Prime Minister, vide Cabinet Secretariat
I.D. No. 216/1/2/2019-Cab dated 27.05.2019 has approved ratification of MLI and
India’s final position under Rule 12 of the Government of India (Transaction of
Business) Rules, 1961 with a direction that ex-post facto approval
of the Cabinet be obtained within a month. Consequent to approval under Rule
12, a separate request has already been sent to the L&T Division, MEA, for
obtaining the instrument of ratification from the Hon’ble President of India
vide this office OM F.No. 500/71/2015-FTD-I/150 dated 31/05/2019.”

In Part II of the Article, we will cover
various developments at the OECD relating to International Taxation. We sincerely
hope that the reader would find the above developments to be interesting and
useful.