Service PE Due to Secondment of Employees

In this era of rapid globalization and specialisation, the Multinational Companies (MNC's) often need to move their skilled resources to different locations with a view to fulfill local needs. At times, MNC's send their employees, having expertise in the respective field to help the subsidiaries set up and carry out activities more efficiently. Such secondment arrangements, unless carefully structured, can result in serious tax implications for the foreign MNCs.The Author in this article has critically analysed a recent ITAT decision rendered in the case of J C Bamford and suggested caution points for mitigating Service PE risk