Navigating International Taxation – A Guide for Global Entrepreneurs Doing Business in India

Introduction

With India emerging as a global business destination, many entrepreneurs from countries like the US, UK, Australia, and Singapore are exploring opportunities here. However, doing business in India brings complex cross-border taxation challenges. This guide simplifies the international taxation framework and how foreign companies can legally optimize their tax exposure in India.

Key Concepts Covered

Understanding Residential Status

• Based on the number of days spent in India.

• Determines the scope of income taxed in India.

Double Taxation Avoidance Agreement (DTAA)

• India has DTAA with 90+ countries.

• Benefits: Avoid paying tax on the same income in two countries.

• Example: A UK-based firm paying Indian tax can claim credit in the UK.

Withholding Tax on Foreign Payments

• Applies to interest, royalty, professional fees, etc.

• Tax deduction at source (TDS) rate varies per DTAA.

Transfer Pricing Regulations

• Applies to intercompany transactions.

• Must maintain documentation to justify Arm’s Length Price.

Repatriation of Profits

• Profits can be legally repatriated after taxes.

• Requires CA certification under Form 15CB and Form 15CA.

Best Practices

• Appoint a professional tax advisor in India.

• Review DTAA terms before signing contracts.

• Keep robust documentation for cross-border transactions.

Conclusion

Navigating India's tax framework doesn't have to be complex with the right advisory. Our firm offers specialized international taxation services to help foreign entities operate seamlessly in India while staying fully compliant.

Keywords: DTAA India, Foreign Company Tax India, International Taxation CA Firm, Repatriation.