bugjae.blogg.se - Imposition definition

There is an imposition of tax liability on such a person in any country or.

Much narrower in scope vis-à-vis the judicial interpretation of the termĪs per the proposed definition, a person will be regarded as ‘liable to tax’ in a country in only the following two scenarios: No tax was payable on account of specific exemptions or a loss position.Įven fiscally transparent entities have been allowed tax treaty access on theīasis that their members were liable to tax in the home jurisdiction.ĭefinition of the term ‘liable to tax’ proposed by the Finance Bill, 2021 is Liability was imposed on such a person or after the imposition of a liability , Hitherto a person could claim the benefits of a tax treaty even if no tax Of whether such a country exercises its right to tax that person or not. Of their domicile, residence, or similar criteria such a person should beĬonsidered as being ‘liable to tax’ in that jurisdiction. Has been held that so long as a country has a right to tax a person on account The term has been interpretedĪs not requiring actual payment of taxes nor requiring an actual imposition of a ‘liable to tax’ in the context of tax treaties.

no taxes are levied on individuals in the UAE, Saudi Arabia, Qatar). When no taxes are being imposed in the home jurisdictions (e.g.When the income of fiscally transparent entities gets taxed in the hands of their members or.Such a situation could typically arise in the following scenarios: The controversy has largely been around whether the ‘liable to tax’ criteria would be met when no tax is payable by a person. This has resulted in several interpretational issues over the years. Interestingly, the term ‘liable to tax’ is generally not defined in a tax treaty.

For tax treaty purposes, a person is generally considered to be resident of a country in which they are ‘liable to tax’ on account of their domicile, residence, place of management, or any other criteria of similar nature. To state the matter briefly, access to a tax treaty is restricted to persons who qualify to be a ‘resident’ of a particular country.

While the definition is proposed to be inserted in the Income-tax Act,1961 – it would be more relevant in the context of tax treaties entered into by India. The Finance Bill, 2021 proposes to define the term ‘liable to tax’. Courts in India have generally given a wide connotation to the expression