- Residential status might be getting impacted due to extended stay, in which case DTAA will come to the rescue.
- Under Indian laws, service rendered from India is taxable in India irrespective of residential status
- However, there is a short stay exemption u/s 10(6)(vi) for non-resident
- As per updated Guidance of OECD Article 15 may be interpreted as Country of resident (resident country) has right to tax even if employment is an exercise in source Country if
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- A Person is present in the source country for 183 days or less
- An Employer is not a resident of the source country
- Remuneration is not deductible in the source country
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- However, If the employer is a resident of the source country such taxing rights shall be available with the source country for the period up to which the employee was physically present in that jurisdiction;
- And in case a person qualifies to be a resident of a country due to a stay of a number of days, he may be able to prove that his connections to the other jurisdiction are closer. Accordingly, there would not be any major change in the tax implication.
- It is to be noted here that Indian tax authorities have not issued any specific guidance of similar nature that may be litigated in case they are to be applied in the Indian context. Reference can be made to Circular No. 2 of 2021 providing insights into ITA and the DTAA.
