Relief to EY: ITAT rules Reimbursement of Secondment Charges not FTS under Article 12 of India-USA DTAA

The Income Tax Appellate Tribunal (ITAT) ruled in favor of Ernst & Young (EY), determining that reimbursement of secondment charges does not qualify as Fees for Technical Services (FTS) under Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA). The ruling clarifies that such reimbursements, when they do not involve technical expertise or knowledge transfer, are not subject to FTS taxation. This decision provides significant relief to multinational companies involved in cross-border employee secondments.