ET: Foreign companies' 'permanent' arms to be taxed
The final word has been said on the taxation of business process outsourcing (BPO) units. Tax will be levied on the income of a foreign company with a BPO arm here which qualifies as a permanent establishment (PE). Simply put, if the foreign company has a fixed place of business of its own in India or functions through a dependant agent, it will be construed to have a PE in India and will be liable to tax.