Determining residency status and tax incidence for the seconded employee
Filing Indian and foreign tax returns with DTAA benefits to mitigate effect of double taxation
Analysing tax treatment of ESOPs to seconded employees
Salary structuring to manage global tax exposures
Analysing taxability of social security benefits
Analysing tax implications on the Company/ employer
Reimbursement of salary cost – tax implications in the hands of the Indian Company
Analysing whether the secondment results in formation of a permanent establishment in India for tax purposes
Transfer Pricing implications when secondment/ deputation is to an associated enterprise
Some cases that you may relate to are detailed below:
Mr. Rahul is a UK employee deputed to India since the year 2006. According to Residency Rules in India, for the FY 2015-16, he qualifies as a ‘Resident’. He is also returning to his home country on July 31, 2016. In the present scenario, since the employee qualifies to be a Resident in India, his worldwide income will be subject to tax in India. Therefore, salary earned for the period August 1, 2015 to March 31, 2016 will be taxable in India and exemptions under DTAA- Double Taxation Avoidance Agreement will apply. On considering DTAA provisions and Indian Income Tax Act, the client was advised accordingly.
Mr. Rahul is employed in a software company in India. During the year 2008, he was deputed to Germany. For the year 2008-2009, contribution was made towards Social Security in Germany and from 2009 to 2013, contribution was made to Provident Fund in India. Mr. Rahul who sought our assistance, was provided with Tax consultation with respect to Double Taxation Avoidance Agreements, Social Security Agreements with Germany, Refund of contribution and Tax Planning of the same.
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