Expatriate Tax Services

Decoding complexities of personal taxation of expatriates

An “Expatriate” is a person temporarily or permanently residing in a country and culture other than that of his/her upbringing or legal residence and working abroad on deputation or secondment. In the Indian context, expatriate means (i) Resident of a foreign country working in India (inbound expatriate) and (ii) Indian resident working abroad (outbound expatriate). The taxation of such persons is known as “Expatriate Taxation”.

As India is developing with good pace and emerging as a strong economy with huge potential, there has been a substantial increase in the expatriates employed with global entities or multinational enterprises working in India on various assignments. These expatriates are either part of the top management of the multinational enterprises or highly skilled professionals posessing excellent acumen. The expatriate community visits to India to provide supervisory services, providing technical know-how, establishing leading industry standards and giving training to Indian employees etc. These expatriates are highly paid key personnels and so have high exposure of income tax liability on their incomes. The expatriate taxation involves several complex issues and requires expertise to carry out and manage requisite tax and regulatory compliances due to involvement of high tax burden.

On set up of a business entity in India, these expatriates are appointed at the key management positions of these companies. We offer a wide range of services in the field of expatriate taxation. Our service offerings related to expatriates are as follows:

1. Regulatory Approvals

• Assistance in registering with the Foreigner Regional Registration Office (FRRO)
• Obtaining Permanent Account Number (PAN)
• Assistance in drafting of Secondment, Dispatch and Employment Agreement from tax and regulatory perspective
• Analyze implications of tax equalization agreements

2. Statutory Compliances

• Computation of taxable income and income tax to be paid by the Employer Company
• Co-ordination and compilation of global income and details of the foreign assets of expatriates for disclosure in their individual income tax returns
• Preparation and filing of withholding tax return and assistance/issuance of withholding tax certificates to the expatriates
• Preparation and filing of their invidiual income tax returns

3. Consulting and Advisory Services

• Advisory on determination of the Residential Status of Expatriate
• Advisory on taxability of various sources of income in India
• Advisory on exemption and tax credit mechanism
• Advisory on taxability as per Tax Treaties or Double Tax Avoidance Agreement between India and home country of the expatriate

4. Exit Approvals

• Surrender of “Residential Permit” and obtaining “Exit Visa” from the office of FRRO at the time of departure of expatriate from India for good
• Obtaining No Objection Certificate (NOC) or Income Tax Clearance Certificate (ITCC) from Income Tax Authorities at the time of departure of expatriate from India for good

5. Representation Services

• Handling income tax scrutiny assessment proceedings of expatriate and representing before Income Tax Authorities
• Handling income tax appeal proceedings of expatriate and representing before the Income Tax Appellate Authorities