Case Study
Case Study – 1 Company A Co. is a sourcing entity, for an Indian multinational group, incorporated in country X and is 100% subsidiary of Indian company (B Co.). The warehouses and stock in them are the only assets of the company and are located in country X. All the employees of the company are …
Subdued Matters
Foreign company is completely owned by an Indian company ? Permanent Establishment of a foreign entity in India? One or some of the Directors of a foreign company reside in India? Local management being situated in India in respect of activities carried out by a foreign company in India? The existence in India of support…
Documentation Checklist – Inclusive
Place of business Documents of FCO’s place of business Licenses/trademark of business operations of FCO List of functions perform in FCO with supportive evidence Key Management Number of Key Management residing outside India Travel date from passports – in/outside India Visit of Foreign management to India and purpose of visit Records of key management meetings…
Consequences
CONSEQUENCES Filing of FCO’s regular income-tax returns in India. Global incomes will be taxable in India. FCO’s have to pay advance tax and self-assessment tax as applicable. FCO’s will have to maintain regular books of accounts, vouchers and documents like any other Indian resident companies. FCO’s have to obtain TAN and comply with TDS requirements. Companies will have to get their accounts audited.…
Head Office & Determination of Head Office Location
Definition – “Head Office” of a company would be the place where the company’s senior management and their direct support staff are located or, if they are located at more than one location, the place where they are primarily or predominantly located. A company’s head office is not necessarily the same as the place where…
Determination of Poem
DETERMINATION OF POEM Board Meetings: The location where a company’s Board regularly meets and makes decisions may be the company’s Place of Effective Management (POEM)provided, the Board- (i) retains and exercises its authority to govern the company; and (ii) does, in substance, make the key management and commercial decisions necessary for the conduct of the …
Definition
DEFINITION ‘Active Business outside India’ is defined as: if the passive income is not more than 50% of its total income; and less than 50% of its total assets are situated in India; and less than 50% of total number of employees are situated in India or are resident in India; and the payroll expenses…
Features of Guidelines
FEATURES OF GUIDELINES Applicable from A.Y 2017-18. Applicable to Companies turnover more than 50 Crores in F.Y (Circular No 8/2017). Concept of POEM is on substance over form. To be analysed on year-on-year basis. Financial data of Pervious 2 years and current year to be considered for determining active business of place. The principal of…