Tax in India – Foreign Entities

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Foreign Entities in India usually have the following 4 structures:

  • Branch Office
  • Liaison Office
  • Fully owned subsidiary/ Joint Venture
  • LLP

 

  • Branch Office – It is treated as an Indian permanent establishment of the foreign company and taxed at 40% of profits in India. It is required to comply with the usual requirements of PAN, TAN, annual returns.
  • Liaison Office – As it is not permitted to conduct business and earn profits, it is generally not taxed. However, the statutory requirement of PAN/TAN exists.
  • Fully owned subsidiary/ Joint venture – It is considered as a tax resident of India and usually charged 30% of revenue with some exceptions
  • LLP (Limited Liability Partnership) – It is again considered as a tax resident of India and charged 30% revenue. However, there are no taxes for the partners.

Source: Wikipedia.org and Invest India

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