Netflix plans to move the Income Tax Appellate Tribunal (ITAT) against the Rs.196-crore income tax evasion case. The Income Tax department’s international tax wing has accused the streaming giant of evading income tax amounting to RS 196 crore on a profit earned from its Indian operation.
The decision to approach the tribunal came after the Dispute Resolution Panel (DRP) earlier this year ruled in favour of the tax department.
The Income Tax department had contended that Netflix Entertainment Services (India) LLP acted as a dependent agent permanent establishment (DAPE) of Netflix. Total revenue generated by the company’s operations between April 2020 and December 2020 was above Rs.1,145 crore. Of this, Rs.1,008 crore was profit, of which attribution to Indian operations was calculated as Rs.503.
Income Tax Department contended that the operation carried out of India through PE (Permanent Establishment) in India is taxable, and so the tax amount is Rs.196 crore.
A Netflix spokesperson is quoted as saying “We fully adhere to tax laws and their requirements globally.”
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Follow the Link to understand the tax implication on a foreign company having PE in India:https://knmindia.com/permanent-establishments-in-india/