How will the establishment “most directly concerned with the supply” be determined?
This will depend on the facts and supporting documentation, specific to each case. The documentation will include the following:-
• The contract(s) between the service provider and receiver;
• Where there are no written contracts, any written account (documents, correspondence/e-mail etc) between parties which sets out in detail their understanding of the oral contract;
• In particular, for suppliers, from which establishment the services are actually provided;
• In particular, for receivers, at which establishment the services are actually consumed, effectively used or enjoyed;
• Details of how the business fits into any larger corporate structure;
• The establishment whose staff is actually involved in the execution of the job;
• Performance agreements (which may be indicative both of the substance and actual nature of work performed at a particular establishment);
Thus , normally in the case of multiple establishments of a person, it will be the establishment that actually provides, or receives (i. e. uses or consumes), a service that would be treated as ‘directly concerned’ with the provision of service, notwithstanding the contractual position, or invoicing or payment.
A business has its headquarters in India, and branches in London, Dubai, Singapore and New York. Its business establishment is in India.
An overseas business house sets up offices with staff in India to provide services to Indian customers. Its fixed establishment is in India.
A company with a business establishment abroad buys a property in India which it leases to a tenant. The property by itself does not create a fixed establishment. If the company sets up an office in India to carry on its business by managing the property, this will create a fixed establishment in India.
A company is incorporated in India, but provides its services entirely from Singapore. The location of this service provider is Singapore, being the place where the establishment most directly concerned with the supply is located.