Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: TDS :: articles on VAT and GST in India :: list of goods taxed at 4% :: VAT Audit :: VAT RATES :: ACCOUNTING STANDARD :: form 3cd :: cpt :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: ACCOUNTING STANDARDS
 
 
« News Headlines »
 Income-tax (17th Amendment) Rules, 2017
 GST: One nation, one market, one tax
 Ready or not, businesses brace for biggest-ever tax reform
 Ready or not, businesses brace for biggest-ever tax reform
 Make your inventory and invoicing software GST Ready from Binarysoft
 Filing income-tax returns gets simpler for salaried persons
 Ten rules you must follow while filing income tax returns
 Reforming the income tax tribunal
 How the new system might impact consumers and businesses
 10 ways you get benefited from filing your tax return
 Returns under CGST Act,2017 with Rules

Tax blow to expat employees
March, 26th 2009

The taxman has finally caught up with expatriate employees.

The Supreme Court today directed Indian subsidiaries of foreign companies employing expatriates to deduct tax at source on their entire salary just as domestic companies do.

The order has sent a frisson through industry and caps a prolonged litigation on the issue that dates back to 2000.

The judgment which was read out in court but hasnt yet been issued ends a long-drawn dispute between the income tax department and several Japanese, Korean and European companies.

Expatriate employees showed only a part of their income in India while the rest was paid outside the country by the foreign parent and was, therefore, kept outside the reach of the taxman.

The tax authorities had argued that if they were employed in the country, all of their income was taxable.

The Supreme Court order upheld an appeal filed by the income tax department against orders passed by the Income Tax Appellate Tribunal between 2000 and 2003 and Delhi High Court in 2004. They had ruled that the local subsidiaries were not liable to deduct tax on salaries paid to expatriates by their foreign parents outside India.

Subramonium Prasad, a lawyer, said the court had laid down guidelines with respect to TDS on expat salaries.

Mavens said expatriate employees who had paid advance tax on their own or made some other arrangements to pay tax would no longer be allowed to do so. Istead, the companies will have to deduct 30 per cent by way of TDS.

Foreign companies will now have to collect tax on that portion of salary that was being paid abroad on a monthly basis and add it to the tax that was being deducted on salaries paid in India for services rendered here. The two components will have to be clubbed to pay the TDS on a monthly basis. Several expatriates who were paying advance tax on their own did so on a quarterly basis, said PricewaterhouseCoopers executive director Rahul Garg.

The companies involved in the dispute included Mitsui and Co, Asahi Glass, Hyundai Engineering, Hitachi, Bank of Tokyo-Mitsubishi, NHK Japan Broadcasting Corporation, Aeroflot Russian Airlines, Sencma SA, France, Samsung, Alcatel South Asia Pacific, Ericsson Telephone Corporation Ltd, Eli Lilly Company, British Airways and Bank of Nova Scotia.

The Supreme Court also said that no penalties would be levied on these companies for not paying TDS in the past.

While foreign companies are now liable to pay tax, the court has given them relief with respect to penalties. It felt that the matter was complex and there was reasonable cause on the part of the companies for not deducting tax at source in the past, said Ernst & Young tax partner (human capital) Amitabh Singh.

The apex court had admitted the batch of appeals in 2006.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Website Ranking Website Ranking Company Website Positioning Alexa Ranking Website Promotion Website top 10 ranking website top 10 promotion search engine result promotion Strategic Internet Marketing Website Optimization Website Ranking Factors

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions