Tax
A foreign company can be taxed in India without an office of its own
What the Court held
In Hyatt International Southwest Asia Ltd v. Additional Director of Income Tax (Supreme Court of India, 24.07.2025; 2025 LiveLaw (SC) 738), the Court held that a permanent establishment in India can exist even where the foreign enterprise does not have premises exclusively at its disposal. Continuous operational presence and control over the activity in India can be enough to satisfy the tax nexus under the relevant Double Taxation Avoidance Agreement.
Why it matters
Whether a foreign enterprise has a permanent establishment in India decides whether, and how much, of its income is taxable here. By looking to substance, the continuity of the presence and the degree of control, rather than only to whether a dedicated office exists, the decision widens the circumstances in which a foreign business may be found taxable in India. Cross-border arrangements should be reviewed with that in mind.
This note is general information on the law as at the date shown, not legal advice on any specific matter. The law changes; for advice on your facts, please speak to the firm.
Tell us about your matter.
Share the facts and we will tell you, candidly, where you stand and how we can help.