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June 2024

Article 13 of India-Denmark DTAA — Assessee, a Danish tax resident, had obtained software licenses from Microsoft for its group entities and received payments from its Indian AE SGIPL. Since software was used by Indian AE, and such use did not involve any transfer of copyright or other rights, as neither assessee nor SGIPL had right to sub-license or modify software, payment made by Indian AE to assessee could not be characterised as royalty.

By Geeta Jani | Dhishat B Mehta | Bhaumik Goda, Chartered Accountants
Reading Time 2 mins

6 [2024] 161 taxmann.com 590 (Delhi - Trib.)

Saxo Bank A/S.vs. ACIT

ITA No: 2010/Del/2023

A.Y.: 2020–21

Dated: 16th April, 2024

Article 13 of India-Denmark DTAA — Assessee, a Danish tax resident, had obtained software licenses from Microsoft for its group entities and received payments from its Indian AE SGIPL. Since software was used by Indian AE, and such use did not involve any transfer of copyright or other rights, as neither assessee nor SGIPL had right to sub-license or modify software, payment made by Indian AE to assessee could not be characterised as royalty.

FACTS

Assessee was a tax resident of Denmark. It entered into a global agreement with Microsoft for procuring various shrink-wrapped software licenses such as Microsoft Visual Studios, Dynamic 365, remote desktop, office 365, etc., for enti

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