Indian Tribunal Holds Franchise in India Does Not Constitute PE under Tax Treaty with the U.S.

The Mumbai Income Tax Appellate Tribunal issued a decision on 29 June 2018 concerning whether an Indian franchisee constitutes a dependent agent permanent establishment (PE) for the U.S. franchise owner.

The case involved U.S. franchise owner Domino's, which entered into a master franchise agreement with an Indian company, Jubilant Foods, for franchise stores in India. Under the agreement, Jubilant was granted the right to use the franchise trademark and any new technology, product developm…