Tax Treaty Case Law around the Globe 2019
1. Aufl. 2020
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S. 921. Introduction
Most of us, users of credit/debit cards, are familiar with the name MasterCard. But, MasterCard does not actually issue any cards. So, how is it that its name is associated with credit cards and, more importantly, how does it make a profit and where should its profits be taxed? One of the most controversial cases decided in 2018 by the Indian Authority of Advance Ruling poses some of these questions and tries to find some answers.
2. Facts of the case
MasterCard Asia Pacific Pte. Ltd, Singapore, (MCAP) is a part of the MasterCard group of companies and is the regional headquarters for its operations in the Asia Pacific, Middle East and Africa Region. MasterCard Incorporated, USA (MCI, US) is the ultimate owner of the intellectual property (IP). Amongst its many subsidiaries isDelaware based MasterCard International Inc. (MCI) which owns MasterCard Holding Singapore Pte Ltd that in turn owns MCAP. The group also has an Indian subsidiary MasterCard India Pvt Ltd (MCIPL) that is owned 99% by MCAP and 1% by the Singapore Holding Company.
MasterCard has extensive operations in India. Its customers are banks and financial institutions that issue credit cards to end-users. It ...