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India: Treaty exemption available to foreign airline company in respect of code sharing arrangement (Tribunal decision)

The Tribunal reiterated that to qualify for exemption under Article 8 of the treaty, it is not necessary that the taxpayer itself operates the ships or aircraft.

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November 19, 2024

The Mumbai Bench of the Tribunal held that the receipts in respect of the code sharing arrangements (CSA) are covered by Article 8 of the India-United States treaty and are not taxable in India.

The tax treaties exempt the profit from the operation of ships or aircraft in international traffic from the source taxation. One of the requirements to benefit from such an exemption is that the taxpayer must undertake the transportation as an owner, lessee or charterer of that ships or aircraft.

The case is: Delta Air Lines Inc. v ACIT

Read a November 2024 report prepared by the KPMG member firm in India

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