Quarterly Insights — International Tax & Transfer Pricing
A quarter that questions two long-held positions: when an intra-group buyback is ‘corporate reorganization’ under a tax treaty, and when virtual services from abroad are taxable as FTS. The Safe Harbour regime has also been rewritten under the new IT Rules, 2026.
Inside this briefing:
Delhi ITAT (Third Member) — Huntsman Investment (Netherlands) BV: Intra-group share buyback recognised as ‘corporate reorganisation’ under Article 13(5) of the India-Netherlands DTAA. Gains not taxable in India.
Bombay High Court — Benteler Automotive (China): Services rendered entirely from China by email and video, with no employee visit to India, do not qualify as FTS under Article 12(4) of the India-China Treaty.
Safe Harbour Rules — Rule 89 of IT Rules, 2026: Margins recalibrated (15.5 percent across software development, ITES, KPO and contract R and D for software) and the threshold raised to INR 2,000 crores. Old Rule 10TD ceases on 31 March 2026.