Case Note: Payments to Foreign Entity to Accelerate Access to Online Content Not Income under Income Tax Act or United States Treaty

Abstract

This case note summarizes the recent ruling by the Authority for Advance Rulings in Akamai Technologies Inc. that payments received by a foreign company from its Indian subsidiary for a content delivery solution to accelerate online content and business processes under a services reseller agreement were not in the nature of fees for technical services or royalties under the Income-tax Act, 1961 or the India-United States Income Tax Treaty (1989), and that the arrangement did not create a permanent establishment of the foreign company in India.