Question

Kareem is a famous actor. He is an Indian resident. Actors Anonymous is a Thai company that hires actors and sends them to schools in remote locations all over the world to perform, with the hope that they will encourage students to pursue a career in acting. Kareem signs a contract with Actors Anonymous in Paris. The contract provides for payment in French francs to be credited to a Swiss bank account. Under the contract, Kareem must perform on the Indonesian island of Gilair that has experienced an earthquake. What is the source of the payment for performing on Gilair?

Select one: a. Gilair

b. Thailand

c. Switzerland

d. France

Answer 1

In the given case, there are multiple aspects which need to be considered as below:

The actor is an Indian Resident - Tax country shall be India; Contract is signed with a Thai Company - based out of Thailand; Payment is been made in French Francs and Performance to be given in Indonesia.

To understand the Source of Income, the primary relationship is with the firm with which the contract is signed. This establishes the source of payment. The payment made in French Francs is mere an Foreign Exchange transaction. Also, the performance given in Indonesia is more towards the contractual obligations of based on the contract signed with the firm to given performances at different locations. However, ultimately the Thai firm stands liable to honour the payments to the actors.

Hence, the source of payment is Thailand.

Answer: (b) Thailand