Interaction and integration among people, companies and governments worldwide is growing. In the rising competition, corporates in India are looking at business opportunities beyond the boundaries of their countries. What used to be localized business has moved to the international level. Technology has made it possible for people and businesses to operate globally. The international decisions are influenced by tax as well as non tax factors.
Tax laws governing cross-border transactions in India are obscure and intricate, and they can swarm your company with surprises. Being affected by the laws of multiple countries, as a stakeholder of your company you would want to ensure that you are aware of the laws and that your company is complying with all the requirements of the multiple countries while entering into a cross border transaction.
Greenvissage has dedicated teams for different laws and compliance areas and thus has built in specialised wings. A cross border transaction is evaluated by respective teams and an expert opinion is given on the basis of in depth knowledge base. We advise on an international transaction keeping in view the Indian Income Tax Act, Companies Act, Foreign Exchange Management Act, Reserve Bank of India Act, Securities and Exchange Board of India Act, Double tax avoidance agreements between countries, social security agreements between countries, transfer pricing methodologies, OECD guidelines etc. It is easy to trust our teams with the systematic planning, documentation, execution and accurate and timely compliance for any cross border transaction.
With over two decades of industry experience, we are aware that your company would like to make business decisions, being fully aware of the tax implications. It is important that the company looks at the different options of structuring the transaction to get maximum benefit out of it and avoid double tax.
There are two basic types of cross-border transactions. Outbound transactions involve Indian taxpayers doing business or investing in foreign countries and inbound transactions involve foreign taxpayers doing business or investing in India.
We guide on selection of entity in India; whether to form a company or LLP or a liaison office etc. Benefits like having a lower tax rate in case of a company but a nil dividend distribution tax under an LLP, cash extraction options with tax implications are evaluated with the investor.
The profits of an enterprise of one country are taxable in the other country, only if the enterprise maintains a PE in the later country and only to the extent that profits are attributable to the PE. When entering into a cross border transaction, it is important to analyse the risk of PE in the other country to avoid any double taxation.
When profits pile up in an investment company, the foreign company looks for ways of repatriation. One of the most common ways of repatriation is dividend payment. Dividend payments attract a distribution tax which is a cost to the enterprise. The best strategy of repatriation for each enterprise will differ and depends on various factors. An Enterprise can combine two or more ways of repatriation and also have different repatriation strategy for each year.
Due to the complex tax system, companies seek assurance on tax implications on proposed transactions through advance rulings. Advance rulings obtained from revenue authorities may affect the decisions of foreign companies for investment in a particular country.
Every foreign company having taxable income in India has to file an income tax return. We prepare and file tax returns after scrutinising all the contracts/invoices with the Indian parties and maintain the records for any future scrutiny assessments. This helps in the assessments as the documentation is all ready.
While making payments to a non resident, it is necessary to evaluate whether withholding taxes are applicable. The tax rate depends on various documents like the no PE declaration, tax residency certificate and form 10F. If the tax is not withheld, the full expense is disallowed for tax purpose. A certificate from a Chartered Accountant is required by bank certifying the withholding tax rate. We assist in ascertaining the applicability of taxes and the execution of remittances.
We have an experience of working across jurisdictions which helps us in drafting the inter-company agreements.
Resident companies incur tax costs outside India which is lost if not claimed against the Indian taxes due by them on their return of income. However, claiming the tax credits is complicated as it involves the double tax avoidance treaties along with the Indian tax laws. Also, there are filings to be done in this regard with the revenue authorities.
Cross border transactions with associated enterprises are critically examined by the tax authorities for any transfer pricing issues. Transfer pricing policies can be either transaction based or a combined approach for similar transactions. The various methods of transfer pricing include the comparable uncontrolled price method (CUP), resale price method, cost plus method, transactional net margin method, profit split method and any such method as prescribed by the tax law. Depending on the transaction, the most appropriate method is selected.
We identify your standard recurring expenses and forecast and budget for it in your expense projection.
While making relevant provisions for it on an annual / monthly basis, we also help you design and frame policies that seek to improve efficiencies within your business unit.
We set in motion a proactive follow-and-update process on accruing regulatory changes that saves you the ordeal of chasing us.
Our deep insight enables us to visualise issues or challenges and give you sufficient buffer time to act on it.
Along with our accounting services we also closely co-ordinate with several agencies such as bankers, auditors, insurers, lawyers, directors etc.
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