We are pleased to send you a copy of THE NEWSFLASH on  “AAR Rules that Indian hotel shall constitute Fixed Place PE for foreign service provider due to degree of ‘control’”


On a recent tax ruling pronounced by the Authority for Advance Rulings (“AAR”) rendered in case of a Luxembourg based non-resident company rendering services to an Indian hotel owner in relation to development, operation and management of hotel property.

In this case, while the tax ruling was sought by non-resident Company only on a limited issue/ question of “taxability of fees for providing Global Reservation Services”.  However, after considering overall scope of various hotel services agreements (such as Hotel Management Agreement, Hotel License Agreement, Centralized Services Agreement, Hotel Advisory Agreement, etc.), the AAR held that due to degree of exclusive control, discretion and authority exercised by non-resident company over operations of Indian hotel, such hotel constituted Fixed Place PE for the non-resident Company in India.  

Here is our Newsflash of this tax ruling is attached herewith for your kind reference.

Hope you will find it useful and informative.

The News Flash- Volume 85