Delhi High Court: Virtual Services Not Taxable Under India–Singapore DTAA

The Delhi High Court has held that virtual legal services rendered from Singapore by Clifford Chance cannot be taxed in India under the India–Singapore DTAA. 

The Bench ruled that the treaty does not recognise a “virtual service PE”, and taxation requires a physical presence or employees rendering services within India.

The Court also accepted that only 44 days involved actual client work, well below the 90-day threshold for a service PE, after excluding vacation, business development, and non-service days shown in detailed records.

Finding no nexus for taxation, the Court dismissed both appeals filed by the Income Tax Department

[Commissioner of Income Tax, International Taxation v. Clifford Chance Pte Ltd]