DTAA | Foreign Company Providing Software To Its Agents In India Doesn't Mean It Has 'Permanent Establishment' In India: Delhi HC

The Delhi High Court addressed the issue of whether a foreign company providing software agents in India would be considered to have a permanent establishment (PE) in India under the Double Taxation Avoidance Agreement (DTAA). The case revolved around a foreign company’s activities in India through its software agents. The Court held that the mere presence of agents in India did not automatically result in the creation of a PE under the DTAA, unless the foreign entity’s activities crossed the threshold defined for establishing a PE. This ruling provides clarity on the conditions necessary for a foreign company to be considered as having a PE in India.