Unit 2: International Taxation

Chapter 1: Foreign Branch vs Subsidiary

Before expanding your business into new territories, you must consider how your business will maintain
compliance in your target markets. The first step to compliance is establishing a legal presence in your new
market. There are many ways to do this, such as setting up an entity, hiring foreign contractors, or utilizing
other global hiring solutions.

As your company begins to research the different ways to hire overseas talent, you will come across an
important decision: Should you establish a foreign branch, or would a subsidiary better suit your needs?

In most cases, the answer to that question is straightforward, but to make the best decision possible for your
business and your international growth goals, you must keep a few key factors in mind

What is a foreign subsidiary?

A foreign subsidiary is a separate legal entity, and as a result can have a totally different purpose than the
main organization. Your company will still hold the majority of the ownership (usually anywhere from 51%
to 99%).

A foreign subsidiary is a company operating in one country that’s part of a larger corporation with
headquarters in another country. While subsidiary companies are sometimes called daughter companies, the
larger corporation is often known as a parent, umbrella, or holding company.

If your company holds 100% of the stock – this is known as a wholly-owned subsidiary. This approach is
not possible in all countries due to local laws over foreign ownership. For example, when CNN opened a
subsidiary in the Philippines, they could not wholly own it due to local laws on media subsidiaries that had
foreign ownership.

The main benefit of opening a foreign subsidiary over a branch office is the separation of liability and risk
between your parent company and the new office. Local compliance issues won’t impact your main
headquarters the way that they could if you had a branch for which you were ultimately responsible.

In contrast, the main challenge with using a foreign subsidiary is that you will have greater tax obligations,
as you’ll need to file separately for the subsidiary as its own entity. With a branch office you can usually use
the same tax return, and benefit from tax agreements that abolish duplicate taxes in the two locations.

What is an overseas branch?

An overseas branch refers to a location or operational extension of a company that is established in a foreign
country and operates as a part of the parent company, sharing resources and branding while remaining
legally connected.
A branch office or an overseas branch is a direct extension of your organization. Its purpose is to help you to
generate revenues in a specific region, as a part of your parent company. Because it isn’t its own legal entity,
it can support the organization but it doesn’t have its own business discretion. It’s a fairly low-cost set up
process, and can often be limited to paying for an office and the staff that you need.

As a branch office is not its own legal entity, generally the parent company retains all control and liability.
There will usually be no joint ownership between the two, which means the buck will stop with your
organization. However, in certain locations this isn’t the case. For example, in Brazil, corporate law
separates the relationship between branches and parent companies, so that branches can enter into contracts
on their own behalf, without the parent company controlling the agreement.

Although many people think that you will be able to set up a branch office far quicker than setting up an
entity abroad, this may not be the case, and there will also be some limitations on what you can do with the
branch office.

Even when it comes to naming the office, some governments enforce a connection with the parent
organization. In China, for example, your branch name needs to contain the nationality and Chinese name of
the parent company, and have the suffix “representative office”. If you wanted to hide the relationship with
your main organization, this would be impossible in China with an overseas branch, but easy to do with a
subsidiary.

Foreign branch vs. subsidiary: What's the difference?

A foreign branch is another location of your company that operates entirely in another country. Think of it
as an extension of your main office, similar to adding on an extension to your current office, but on a global
scale.

A foreign subsidiary is a new business in a foreign country. It is considered a separate legal entity, which
has several distinct pros and cons, depending on your foreign growth goals and what internal resources you
have available to manage this new entity. A subsidiary may have an entirely different business purpose than
its main parent company, while a branch is a mere extension of the parent company. Your corporation must
own more than half of all available voting stock with a subsidiary.

The pros and cons of branches and subsidiaries

One of the main advantages of opening a foreign branch is a more straightforward tax process. Because a
branch office is considered an extension of your primary location, you typically do not need to file a
separate tax return.

If your branch office is in a foreign country, there is usually a tax agreement between your parent company
and the country, so you avoid being taxed twice.

This topic of tax compliance also brings up one of the major benefits of a subsidiary over a foreign branch:
the former enjoys a far greater separation of risk than the latter. When you open a foreign branch, if that
branch experiences a local compliance issue, it could easily create a ripple effect that negatively impacts the
rest of the company.

With a wholly-owned subsidiary, any risk (and the consequences of those risks) is separate from the parent
company.

Of course, this also means that your tax structure is more complicated, and it takes additional time and effort
to make sure that the subsidiary is compliant with all local tax laws and regulations.

This time commitment could limit the number of countries you can expand into because each country comes
with its own set of tax codes, and your company must maintain compliance.

Avoid the burden of establishing a branch or foreign subsidiary

There is another option that has benefits over both a branch and a subsidiary, and that is choosing a global
hiring solution, such as an employer of record (EOR).
An EOR partner enables your company to compliantly hire in almost any country without establishing a
foreign legal entity. This partner acts as your legal employer of record, which means they hire talent on your
behalf and manage all payroll, benefits, risk mitigation, and compliance while you maintain day-to-day
control of your supported employees.

The benefit of an EOR over a branch or subsidiary office is that you establish a foreign presence quickly and
compliantly. Your company can leave any market just as fast in the future if it proves not to be a viable part
of your global growth goals.

An EOR partner helps your teams navigate different tax requirements, saving time and bandwidth that many
companies do not have internally.

While an EOR has several benefits, it may not be a viable option for every company looking to expand
overseas. For example, if your company is looking to hire a high headcount in a specific country, this
solution is typically not cost-effective.

Using an EOR may also not be a viable option if your company is in certain industries that need to hold
fixed assets in a country, such as manufacturing or real estate. Companies that must own physical property
or have a more prominent legal presence in a country will likely need to open a branch or foreign subsidiary
to be compliant.

Chapter 2: Non Resident taxation

1. Introduction
Non-Resident (hereinafter called NR) are required to pay taxes and file their Income Tax Returns
in India on the income earned within the country. Tax Deducted at Source (hereinafter called TDS)
is a major source of revenue for the Government of India and an efficient way of managing any tax
leakages in the system by withdrawing the tax at the time of payment itself, posing the liability of
the same on the payer of the said remittance. Hence, Government of India has made provisions for
deduction of tax on NRs before any payment is made to them. Tax related guidelines governing
payments made to NRs are mentioned under Section 195 of the Income Tax Act, 1961 (hereinafter
called the Act).

2. Meaning of Non-Resident
As per the provisions of Section 6 of the Act, NR is a person who is not residing in India. For an
individual to be called as the resident of India following conditions need to be fulfilled-
1. Must stay for 182 days or more in the particular financial year (or say, previous year),
2. Must stay for 60 days or more for the specific financial year (or previous year) and for 365
days or more for the immediately preceding four financial years.
2.1 Exceptions
a) In the case of an Indian citizen or a person of Indian origin (PIO) whose total income, other than
income from foreign sources:
 Exceeds Rs 15 lakhs during the previous year– 60 days as mentioned in point (2) above
will get substituted with 120 days.
 Is less than Rs 15 lakhs during the previous year – 60 days as mentioned in point (2) above
will get substituted with 182 days.
b) Similarly, for the Indian citizen who leaves India in any year as a crew member or for
employment outside India, the period of 60 days in point (2) above will get substituted with 182
days.
The Finance Act, 2020 has introduced Section 6(1A) to the Income-tax Act, 1961. The new
provision provides that an Indian citizen or PIO earning a total income over Rs. 15 lakhs (other
than from foreign sources) is deemed a resident in India, if not taxed in any other country
Dive Deeper:
Section 195 | Deduction of Tax at Source from Other Sums

3. Section 195 – Applicability and Provision

Section 195 of the Act lays down provisions for deducting tax on all the payments made by any
person to NRs or to a foreign company, which are taxable in India except salary or interest as
defined under Sections 194LB, 194LC and 194LD.
The provisions of Section 195 are applicable in the following cases:
1. Payments made to a NR for services rendered or for sale of goods or merchandise.
2. Interest, royalty, technical services fee or any other sum paid to a NR.
3. Remittances to a NR outside India.
It is important to note that the provisions of Section 195 are not applicable in case of payments
made to residents or to an Indian company.
4. Who is eligible to deduct tax?
Payer or deductor, for the purpose of this section, can be any person as mentioned herewith
remitting the payment to a non-resident-
 Individual
 Hindu Undivided Family (HUF)
 Firm or LLP
 Company
 AOP
 BOI
 Non-Resident
 Foreign Company.
Similar to resident individuals, NRs can claim a TDS refund while filing their return of income in
India.
5. Other provisions of Section 195
Provisions related to TDS as prescribed under Section 195 of the Act are discussed below-
 Tax Deduction Account Number (TAN) should be first obtained by the person deducting tax
under Section 203A of the Act. In order to obtain the same, application in Form 49B (also
available online) is required to be made to the Income Tax Department. For completing the
submission of the form, the deductor should have his/ her own PAN as well as the PAN of
the NR deductee.
 No Tax or Lower Tax order can be taken by applying to the Assessing Officer, if the
deductor or the deductee is certain that the whole income is not chargeable to tax. Rate on
which tax is to be deducted and the validity period are mentioned on the said order of the
Assessing Officer.
 TDS is required to be deducted at the time of payment to the NR or while crediting the
account in the books of accounts by whatever name called, whichever is earlier.
 The TDS amount deducted by the payer is to be deposited through banks authorized by the
Government of India or Income Tax Department via a form number or challan for TDS
payment on or before 7 th of subsequent month in which such TDS is deducted.
 After depositing the TDS, the payer must electronically file TDS return by submitting Form
27Q within the stipulated time frame.
 TDS returns are filed quarterly. Due dates for filing Form 27Q are 31 st July, 31 st October,
31 st January and 31 st May for Quarter 1, 2, 3 and 4 respectively.
 On successful submission of TDS returns, the deductor is mandatorily required to issue TDS
certificate to the NR deductee within 15 days from the due date of filing the TDS return for
the respective quarter. The certificate of deduction of TDS is available in Form 16A.
6. Rate of TDS under Section 195
The rate of TDS under Section 195 depends on the nature of payment and the provisions of the
Double Taxation Avoidance Agreement (DTAA) between India and the country of which the NR is
a resident. In case there is no DTAA, the TDS rate shall be as per the provisions of the Income Tax
Act, 1961 .TDS rates as prescribed under Section 195 shall be increased by surcharge and
education cess as applicable thereon. If the payment to the NR is being made as per DTAA rates,
then the surcharge and education cess are not to be included. The rates prescribed in respect of
various nature of income for non-residents under the Income Tax Act are as follows-
Particulars TDS Rates (%)

Income in respect of investment made by NR 20

Income by way of long-term capital gains in 10

Section 115E, Section 112 and 112A

Income by way of short-term capital gains 15

under Section 111A

Any other income by way of long-term 20

capital gains

Interest payable on money borrowed in 20

Foreign Currency

Income by way of royalty and/or fees for 10

technical services

Any other income – Other than Company 30

– Company 40
7. Form 15 CA and 15 CB
A person responsible for making such remittance (payment) has to submit the form 15CA, before
remitting the payment. In certain cases, a Certificate from Chartered Accountant in form 15CB is
required before uploading the form 15CA online.
The furnishing of information for payment to NR in Form 15CA has been classified into 4 parts:
PART A: Where the remittance or the aggregate of such remittance does not exceed Rs. 5 lakh
during the financial year.
PART B: Where remittance or the aggregate of such remittances exceeds Rs. 5 lakh during the
financial year and an order/ certificate u/s 195(2)/ 195(3)/197 of the Act has been obtained from
the Assessing Officer.
PART C: Where the remittance or the aggregate of such remittance exceeds Rs. 5 lakh during the
financial year and a certificate in Form No. 15CB from an accountant has been obtained.
PART D: Where the remittance is not chargeable to tax under the Act.
8. Consequences of Non-Compliance of Section 195
In case the TDS is not deducted or is not deducted in accordance with the provisions of the Income
Tax Act, 1961, the person responsible for making the payment shall be liable to pay the tax so
deductible, along with interest and penalty as may be imposed by the Income Tax Department. The
consequences of non-compliance with the provisions of Section 195 of the Act can be iterated as
below-
 If TDS is not deducted, it will lead to disallowance of expense under Section 40(a)(i).
 If tax has been deducted but not deposited within the due date, interest at the rate of 1.5%
per month or part of the month shall be levied from the date of deduction to the date of
deposit.
 If tax has been deducted and not at all paid, penalty equivalent to the TDS amount shall be
levied.
 In case of short deduction of TDS, penalty equivalent to the difference between actual
amount of TDS deductible and that actually deducted shall be levied.
9. Procedure of obtaining TDS exemption Certificate
If the whole of the income is not chargeable to tax, an application can be made for TDS exemption
certificate.
 1. NR can voluntarily apply for a Lower TDS Certificate to the concerned Income Tax
Authority, to seek relief in the TDS implication.
2. To apply for the said certificate the NR is required to file Form 13 on the Income Tax Portal
using the login credentials used to create their account on the portal.
3. The applicant is also required to provide the supporting documents asked in the form for
Lower TDS Certificate. The required documents are submitted with Form 13 Application
online.
4. On successful completion and submission of required documents, the application is
forwarded to the Jurisdictional TDS Certificate Officer. The officer reviews the application
and raises observations & further requirements if any.
5. Once satisfied with the authentication of the application, the officer processes the certificate
and allots the Lower TDS to the NR/Foreign citizen in relation to the transaction.
10. Conclusion
Section 195 of the Income Tax Act, 1961 lays down the provisions regarding TDS on payments
made to non-residents and is an important section for those making such payments to ensure
compliance with the provisions of the Income Tax Act, 1961. It primarily focuses on the rates and
deductions on the business transactions entered into with NRs and consequences of its non-
compliance. It is also important to note that the primary responsibility for ensuring the collection
and deposit of the tax due from the NR is placed on the deductor, and not the NR recipients.

Chapter 3: Advance Ruling

CONCEPT OF ADVANCE RULING

Sometimes, a person, who enters into a transaction, may not be sure relating to the amount of tax he may
have to pay, on the income which he earns out of such transaction. In order to obtain certainty, regarding the
tax treatment of such income, a non-resident, has an option to obtain an advance ruling in India, which
outlines, the tax, which would be payable on income arising out of such transactions.
Simply speaking, advance ruling is a mechanism , through which, parties to a transaction, can approach
Authority for Advance Ruling (“AAR”) , to decide what will be the tax implications, of a particular
transaction. This method, avoid tax litigation, as the ruling is binding on the party which obtains it, as well
as the tax authorities.
From the perspective of the Indian payor, it gives them certainty on the amount of taxes which are to be
withheld from the payment to the non-resident.
The transaction, in relation to which the Ruling is provided could be
 Transaction which has been undertaken in the past ; or
 A future
Once such Ruling is given, it brings upfront clarity, with regard to the taxability of income arising from such
transaction to the applicant. The scheme of Advance Rulings reduces potential disputes between the Income-
tax authorities and the taxpayers.

WHO CAN OBTAIN AN ADVANCE RULING AND COVERED TRANSACTIONS

The Authority for Advance Rulings (‘AAR’), gives a ruling to either of the following : –
1. Non – Resident , including a person, who is acting as an agent of the non-resident.
The applicant should be a non- resident, during the relevant accounting year. The fact that he subsequently
becomes a resident, would not make any difference to the eligibility to make an application. There is no
threshold limit for approaching AAR when an application is made by a NR. This implies that the non-
resident can make an application to the AAR, irrespective of the amount of tax involved in a particular
transaction.

2. Residents
A resident applicant can approach Authority for Advance Rulings (AAR) for determining tax liability in
following cases : –
Resident’s tax liability on transactions entered by it either with : –
o Resident ; or
 o Non-Resident.
The threshold limit for approaching AAR for resident is transaction valuing INR 100 Crores or more.
A resident applicant can also approach AAR for determining tax liability of the non-resident arising out of
the transaction entered into by him.

3. Public Sector Undertaking (PSU)

PSUs can approach AAR in respect of an issue relating to computation of total income which is
pending before the tax authority or the appellate authority.

Illustration: MNC Ltd. UK, is a worldwide leader in manufacturing car engines and after support services
for such engines. It intends to sell such engines goods to IMI Private Limited, an Indian company, which
manufactures automotives. The contract involves supply of engines and providing after sales support
services, which would be provided from the factory premises of IMI Private Limited . MNC Ltd. UK , and
IMI are not sure, whether the income arising from such sale and after sale support services would be taxable
in India. Can MNC Ltd obtain an AAR Ruling ? Why should IMI Private Limited be interested in getting
such ruling for MNC Ltd. UK ?
Solution: Authority for Advance Rulings, gives a ruling to a non-resident relating to transaction which is
proposed to be undertaken. Hence, MNC Ltd. UK can obtain an AAR Ruling . IMI Private Limited would
be interested in getting such ruling for MNC Ltd. UK, since it is under a legal obligation to withhold tax
from such payments. If it does not withhold taxes, and Indian Government is unable to recover such taxes
from MNC Ltd. UK, it shall be liable for the following consequences : –
 TDS can be recovered from IMI, considering it as an agent of MNC UK ;
 It shall be liable for interest for non-deduction of TDS @ 1% per month from the date such
tax was deductible till the date such tax is deducted;
 It may be liable for penalty for default in deduction of TDS

Illustration: XYZ Ltd UK, has been supplying software since FY 2016-17 to IMI Private Limited, an
Indian company for a total consideration exceeding Rs. 200 crores per year . There are no income tax
proceedings pending against XYZ Ltd UK, in respect of any transaction in India. Can XYZ Ltd UK, obtain
an Advance Ruling during FY 2018-19, assuming the sales are likely to exceed Rs. 200 crores in this FY as
well ? Alternatively, where IMI sells such goods to another unrelated Indian company for Rs. 225 crores,
can IMI Private Limited, an Indian company obtain an Advance Ruling to determine its own tax liability ?
Solution: The Authority for Advance Rulings (‘AAR’), gives a ruling to a non-resident relating to
transaction which has been undertaken, provided certain conditions are satisfied.
Given that there are no income tax proceedings pending against XYZ Ltd UK, and assuming other such
conditions are satisfied, XYZ Ltd UK can obtain an AAR Ruling.
IMI Private Limited can obtain an AAR Ruling to determine its own tax liability, assuming it falls within the
definition of “specified person”, given that the transaction value is more than Rs. 100 Crores.

ADVANTAGES OF AUTHORITY FOR ADVANCE RULING

 Ascertain Tax implications beforehand and planning business
 Ascertain Tax implications for a resident applicant
 Time bound resolution
 Complex issue resolution
 Binding nature & Continuity of Ruling

Ascertain tax implications prior to transaction

AAR enables the non-residents, to ascertain the income tax liability of a proposed transaction, beforehand
(i.e, even before making an investments or entering into any actual transactions in India). Hence, the non-
resident can plan their investments, considering the tax cost, based on the AAR Ruling. This would help
them to evaluate, whether a given transaction generates sufficient after tax returns on investment, as are
required by non-resident investor. Further such a Ruling, also helps the non-resident investor to avoid long-
drawn litigation.
Ascertain tax implication for a resident applicant
Where a resident applicant, enters into a transaction with the non-resident, he can determine the tax liability
of non-resident with whom he may transact. This would be particularly helpful in case of contract where the
tax liability of the non-resident is to be borne by the resident applicant.

Time Bound Resolution

The Authority is to pronounce its ruling within a statutory time limit of six months of the receipt of the
application. This helps in providing a time bound resolutions instead of long term litigations. However, in
certain cases, it has been noted that the rulings may take more than 6 months.

Complex issues resolution

Generally, issues relating to International tax are complex, and involve not only the interpretation of the
Income Tax Act, 1961, but also, interpreting double taxation avoidance agreements (DTAA). In many
cases, there may be a difference in opinion , between the parties to a transaction, or between taxpayer and
tax authorities. Such issues can be resolved, through the process of advance ruling.

Binding Nature
The rulings of the Authority, are binding on the applicant as well as the Commissioner, and the income-tax
authorities subordinate to him. This avoid unnecessary litigation, as both the taxpayer and tax authorities, are
bound by such ruling.

Continuity of ruling to future years

Once the ruling has been obtained on a given set of facts, the taxpayer may be sure about his liability not
only for one year, but for all the years covered under the transaction unless there is a change in the facts or
law. However, in case there is a change in any of the facts, basis which the ruling was obtained, or the
provision of law change, which impact the tax position, the ruling will not apply.

COMPOSITION OF AAR
The AAR constituted by Central Government shall consist of : –
a) Chairman, who has been a Judge of the Supreme Court or the Chief Justice of a High Court or Judge of a
High Court for at least seven years.
b) Vice-chairman, who has been a judge of High Court;
c) Member from the Indian Revenue Service (IRS), who is qualified to be a member of the Central Board of
Direct Taxes or member from the Indian Customs and Central Excise Service, who is, or is qualified to be, a
member of the Central Board of Excise and Customs; and
d) Member from the Indian Legal Service (ILS) who is, or is qualified to be, an Additional Secretary to the
Government of India.

Illustration: UVX Inc. USA, owns certain shares in an Indian company. It entered into certain discussion
with a Private Equity investor, to sell such shares for USD 500 million. Based on the advice received from
its tax Advisors, it was ascertained that such a transfer would result in a tax liability of USD 100 million in
India. However under the domestic laws of USA, there was no tax payable on such capital gains, since UVX
Inc. had sufficient brought forward losses. Under such circumstances, it’s tax Advisors came up with a plan
whereby immediately before such a transfer, it would contribute such shares as a gift to its wholly owned
subsidiary in Singapore, which would then sell such shares. Under the new facts, the gains arising on such
transfer, would be exempt from tax in India, under the India Singapore treaty. However, UVX Inc., is not
sure, whether such a stand would be accepted by the Indian tax authorities. What would be your view to
help UVX Inc., such that it gets certainty regarding its tax liability in India? What would be the advantage of
your advice to UVX, to avoid litigation in future with tax authorities ?
Solution: Under the Indian laws, a Non-resident applicant can approach Authority for Advance Rulings
(AAR), to determine, whether a transaction which is proposed to be undertaken, is an impermissible
avoidance arrangement. We would advise UVX to approach AAR and obtain certainty on tax implications
of proposed rearrangement advised by tax advisors. Once such Ruling is obtained, it is binding on the
Commissioner, and the income-tax authorities subordinate to him. This avoid unnecessary litigation.
WHEN AN ADVANCE RULING CANNOT BE SOUGHT ?

In the following cases, in advance ruling cannot be sought : –

1. Question is pending before other authorities.

In case the question raised in the application, is already pending before any income-tax authority,
Tribunal or any Court, the Authority cannot allow application.
For e.g. a notice for initiation of assessment proceedings may be regarded as pendency of proceedings
and may create an application invalid before AAR.

2. Question involves determination of fair market value of any property.

No application can be made before the AAR on questions, relating to the determination of fair market
value of any property, movable or immovable.

3. Transaction is designed prima facie for tax avoidance.

The application would not succeed, if it relates to a transaction, which is designed prima facie for the
avoidance of income-tax. Only the prima facie impression created in the mind of the Authority on the
facts stated before it, that transaction is undertaken to avoid income tax is sufficient cause for rejecting
the application. It is not necessary to refer the detailed facts of the case to determine whether a particular
transaction is designed to avoid income tax.

4. Other Cases
Questions cannot be raised with respect to quantification of income of a taxpayer or for determination
of arm’s length price under Indian Transfer Pricing regulations.

Illustration: Alpha Inc. USA, earned royalty income for use of brand from an Indian company. In the past,
it claimed that the royalty income was not taxable in India. This time was not accepted by the Indian tax
authorities, who passed or negative order against Alpha Inc. This order was appealed against by Alpha Inc.
and the matter was currently pending with Income Tax appellate Tribunal. Alpha Inc wanted to make an
application with the authority for advance ruling, on whether such income was liable to tax in India.
Comment such application is maintainable ?
Solution: In case the question raised in the application, is already pending before any income-tax authority,
Tribunal or any Court, the Authority cannot allow application. Hence the application of Alpha inc., is not
maintainable and would not be allowed by the authority for advance ruling.

PROCEDURE TO BE FOLLOWED IN CASE OF AN APPLICATION BEFORE AAR

Once, a proper application has been filed before the Authority for Advance Rulings, the following procedure
shall be followed : –
Step I: Authority for Advance Rulings shall forward a copy of application to Commissioner to ascertain
whether the case is pending or not, and if necessary call for the records.

Step II: AAR may allow or reject the application. In case application is rejected following points should be
noted: –
1. Before rejecting the application, an opportunity of being heard shall be given to the applicant.
2. Reason for rejection shall be given in the order.
3. Copy of order shall be sent to the applicant and to the CIT.
4. No appeal is possible against order of rejection

Step III: After allowing application and examining the information placed before it, AAR pronounces its
Advance Ruling on the question specified in the application.

Step IV: On request of applicant before pronouncing its Advance Ruling, AAR shall provide an
opportunity of being heard to the applicant, either in person or through an authorized representative.
Step V: AAR shall pronounce its Advance ruling in writing within 6 months from the date of receipt of
application.

Step VI: A copy of the Advance Ruling pronounced by AAR shall be sent to applicant and to the
Commissioner.