Applicability of bilateral tax treaties in triangular cases – Part 2

In part 1, I have discussed some of the situations in which triangular cases arise. In this part, i am focusing on first situation i.e. PE triangular case.

In this scenario, the income is taxed in the third state (State C) which is the source of the income earned by the PE. Thereafter, the same income is taxed in the State in which PE of the State A is located i.e. State B. Finally, the income which is taxed twice, is taxed third time in the State of residence of the person i.e. State A. A PE triangular case is illustrated in the following diagram –

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