CBDT notifies Threshold for Significant Economic Presence

On 3rd May, 2021, the Central Board of Direct Taxes (CBDT) notified a threshold for Significant Economic Presence (SEP).

  • This will come into effect from the 1st April 2022.

Key Points

  • The threshold of aggregate payment of Rs. 2 crores and user base of 3 lakhs seems quite low considering the user base in India of few e-commerce giants such as Facebook or Google.
  • Existing Double Taxation Avoidance Agreements(DTAAs) will not cover the proposed change unless DTAAs are re-negotiated. Accordingly, non-resident of the treaty jurisdiction can take recourse to the beneficial provision of DTAA. Consequently, the relevance of the amendment may be ....
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