Tax Treaty Case Law around the Globe 2020
1. Aufl. 2021
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S. 135Chapter 13 India: Beneficial Ownership in the Context of Capital Gains from Transfers of Shares – The Becton Dickinson case
D.P. Sengupta
13.1. Introduction
The ruling in Becton Dickinson was given by the Indian Authority of Advance Ruling (AAR). The case relates to transactions that took place in the pre-BEPS world. It involves the taxation of capital gains arising from the transfer of shares of an operating company in India between subsidiaries of a US company incorporated in two tax-favourable jurisdictions, namely Mauritius and Singapore. The case relates to the period of 2011, before the relevant article of the India-Mauritius Income and Capital Tax Treaty (1982) relating to the taxation of capital gains was changed in 2016, giving taxing rights to the country of residence of the company whose shares are being transferred. That amended treaty also grandfathered in the treatment of capital gains arising from investments made before 2017. Predictably, the ruling was in favour of the taxpayer.
13.2. Facts of the case
In the context of the India-Mauritius Income and Capital Tax Treaty (1982), particularly before its amendment in 2016, the facts of the case are rather unremarkable. It i...