NITI Aayog releases first Tax Policy Working Paper on Permanent Establishment and profit attribution for foreign investors
On 3 October 2025 in New Delhi, NITI Aayog released the first paper in its Tax Policy Working Paper Series–I, on improving tax certainty around Permanent Establishment and profit attribution for foreign investors.
Summary
On 3 October 2025 in New Delhi, NITI Aayog released the first paper in its NITI Tax Policy Working Paper Series–I, titled 'Enhancing Tax Certainty in Permanent Establishment and Profit Attribution for Foreign Investors in India'. It comes from NITI's Consultative Group on Tax Policy (CGTP), which works on ease of doing business, FDI promotion and simpler tax laws. The paper says foreign investors face major tax uncertainty and compliance burdens over Permanent Establishment (PE) and profit attribution. Even so, FDI inflows have risen sharply over two decades. It proposes an optional, industry-specific Presumptive Taxation Scheme for foreign companies, along with clearer laws, more efficient administration and stronger dispute resolution. It asks the Finance Ministry to consider the framework for future Finance Bills after consulting industry, experts and treaty partners.
Key facts
- Paper
- Enhancing Tax Certainty in PE and Profit Attribution for Foreign Investors in India
- Group
- NITI Consultative Group on Tax Policy (CGTP)
- Key proposal
- Optional, industry-specific Presumptive Taxation Scheme for foreign companies
- Next step
- MoF to consider for future Finance Bills
Practice MCQs 2 questions
The first paper in NITI Aayog's Tax Policy Working Paper Series–I (October 2025) deals with which issue?
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Correct answer: C — Permanent Establishment and profit attribution for foreign investors
PIB (NITI Aayog): the first working paper is titled 'Enhancing Tax Certainty in Permanent Establishment and Profit Attribution for Foreign Investors in India'.
NITI Aayog's October 2025 working paper on Permanent Establishment recommends introducing which of the following for foreign companies?
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Correct answer: D — An optional, industry-specific Presumptive Taxation Scheme
PIB (NITI Aayog): the paper recommends an optional, industry-specific Presumptive Taxation Scheme for foreign companies, with legislative clarity, administrative efficiency and robust dispute resolution; it was prepared under NITI's Consultative Group on Tax Policy.