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India: Activities of Indian subsidiary did not create PE for Finish parent under Finland treaty (High Court decision)

Subsidiary was pursuing independent line of business and had no authority to bind parent

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February 26, 2025

The Delhi High Court held that the activities of an Indian subsidiary of a Finnish company did not create a permanent establishment of the Finnish parent company under the India-Finland income tax treaty.

The subsidiary installed telecommunications equipment provided by the Finnish parent company in India under separate contracts between the subsidiary and unrelated Indian customers. The court found that because the subsidiary was pursuing an independent line of business with unrelated Indian customers and had no authority to conclude any contract of supply of equipment binding the parent, it did not create a PE for the parent under the treaty.

The case is: CIT v. Nokia Network OY

Read a February 2025 report prepared by the KPMG member firm in India 

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