India: Performance of liaison and support functions did not create PE in India under Swiss treaty (tribunal decision)
PE requires authority to negotiate and enter into contracts and habitual exercise of such authority.
The Delhi Bench of the Income-tax Appellate Tribunal held that the taxpayer’s Indian group company did not constitute a dependent agent permanent establishment (DAPE) under the India-Switzerland income tax treaty because the company merely performed liaison and support functions, while all key commercial decisions were made by the taxpayer’s overseas leadership.
The tribunal emphasized that for a DAPE to exist under the Swiss treaty, the Indian company must have the authority to negotiate and enter into contracts and habitually exercise such authority, and one isolated instance does not automatically establish habitual exercise.
The lead case is: Expedia Lodging Partner Services SARL v. ACIT (ITA No. 1886/Del/2025)
Read an October 2026 report prepared by the KPMG member firm in India