A Treatise On International Taxation That Must Grace Your Library

The law on International Taxation is a specialist and complex subject. There are so many nuances to the law that unless you have a deep grounding in the subject, you will soon find yourself out of your depth and feel lost.

This is where the treatises by renowned authors like Klaus Vogel & Philip Baker come in handy. With their deep understanding of the subject, they are able to explain it in a manner which makes it easy for you to comprehend. However, as any professional practicing international taxation will tell you, while a lot of comfort and enlightenment is derived by reading these treatises, you always feel insecure unless you know what the Indian courts have to say on the subject.

That void, of not having authoritative commentaries by Indian authors, was filled in 2008 by Rajesh Kadakia and Nilesh Modi, with their best seller “The Law And Practice Of Tax Treaties: An Indian Perspective”

Both authors, Rajesh Kadakia and Nilesh Modi, have impeccable credentials. They work in the field of international taxation and have advised some of the largest conglomerates in the World. There are few problems in the arena of international taxation that the authors would not have tackled.

The first edition of the book sparkled because it gave you not only the views of the OECD and UN on every Article of the Model Convention, but it also gave the law laid down by the Indian courts and the citations for the same.

Six long years have passed and much water has flowed down the bridge since the first edition. There are a plethora of judgements that need to be analyzed and commented upon.

In the second edition, Nilesh Modi, now listed as the sole author of the book, has wisely not changed the success formula of the book though he has significantly improved it.

One aspect that you will straightaway notice is the prolific reference to foreign judgements. This wasn’t there in the first edition or at least to the extent to which it is there in the second edition. While some are from the IBFD database, which requires a paid subscription, the others are from the Australian Tax Office and the US/ Canadian courts, which are readily available in the public domain.

It is very easy to navigate your way through the book and quickly find what you are looking for.

For instance, I was looking up the law on whether a prolonged stay in a hotel would constitute a “permanent establishment” under Article 5, given that the foreign enterprise had no “power of disposition”. To my delight, within just a few moments of flipping the pages of the book, I found the answer together with the latest judgments on the issue.

Another issue that I was researching is whether a PE can claim deduction of expenditure under Article 7(3) of the DTAA without being subject to the restrictions like s. 40(a)(i), 43B etc. This is a subject matter of great controversy and I was happy that the author has dealt with the topic (para 7.3.10) with a great deal of clarity, by giving a reference to all the judgements on the issue.

Similarly, on the controversies of the taxability of “fees for technical services” and “royalties” (including whether shrink-wrap software can be assessed) you will find illuminating commentary.

There are several other such examples where I could readily find answers to issues that I was researching.

You can also sense the depth of the author’s knowledge because he is not content with just listing out all the judgements. Instead, he does add a critical comment or two on why the judgement may deserve to be reconsidered.

The pricing of the book (Rs. 3,595, after a 10% discount) is also virtually a steal, especially when you compare it with the tens of thousands of rupees that you would have to shell out for the treatises by Klaus Vogel, Philip Baker and other foreign authors.

All in all, if you are into any sort of serious international taxation practice, this book is really a must-have for your library.