International Taxation
Cross border tax is where a commercial decision taken in one country meets a tax rule written in another, and neither was drafted with the other in mind. We help Indian companies with operations, customers or related parties abroad, and Indian subsidiaries of foreign groups, run that position deliberately rather than discovering it in an assessment order.
- Transfer pricing documentation, the accountant's report and the safe harbour election
- Withholding on payments abroad, treaty relief and the residence certificate paperwork
- Permanent establishment risk, and what it costs once one is found
- Outbound investment, foreign tax credit and getting profit where it needs to be
- Assessments, the Dispute Resolution Panel, appeals, mutual agreement procedure and advance pricing agreements
Five things that go wrong, and the work that stops them
Every one of these has a filing attached to it, and most have a deadline that falls before the return.
Transfer pricing files, the accountant's report and country by country reporting
The accountant's report has no monetary threshold. One rupee of international transaction with a related party triggers it. The Master File catches a great many Indian subsidiaries that believe they are below the line, because one part of it is due whatever your size. We prepare the file, benchmark the transactions, and file the forms.
Withholding on payments abroad, and the treaty paperwork behind the rate
A treaty rate is not self executing. It depends on a residence certificate and a filing the payee has to make before the payment, and the form that carries it was renumbered this year. Getting this wrong makes the Indian payer, not the foreign recipient, liable for the tax.
Permanent establishment risk, and the profit that follows it
A foreign enterprise can become taxable in India through people, through a place, through an agent, or now through nothing more than customers and users. The Supreme Court has moved this line recently, and in the direction of finding a presence more easily rather than less.
Outbound investment, repatriation and foreign tax credit
Putting money into a foreign subsidiary, bringing profit back, and claiming credit for tax already paid abroad are three separate rulebooks that have to agree with each other. Two of the three were rewritten in the last four years.
Assessment, appeal, and the two ways of avoiding the argument
Transfer pricing and permanent establishment are the two largest sources of long running tax litigation in India. There are two mechanisms designed to keep you out of it, and both have to be started before the dispute exists, not after.
One view of the whole cross border position, not five
These questions are not independent. A transfer pricing policy sets the royalty rate that drives the withholding, which affects the treaty claim, which is evidence in a permanent establishment argument. We look at the whole thing once a year rather than each piece when it becomes urgent.
The law changed underneath everything, on 1 April 2026
Two Acts are live at the same time, and that is not a transitional detail
The Income-tax Act 2025 came into force on 1 April 2026, replacing the Income-tax Act 1961, and the Income-tax Rules 2026 replaced the Income-tax Rules 1962 on the same day. The 1961 Act and the 1962 Rules still govern FY 2025-26, which is the year most companies are filing for right now. So the correct section number, rule number, form number and in some cases the correct answer depends on which year you are asking about. Sections were renumbered. Rules were renumbered. Forms were renumbered, and at least one rule number was reused for a completely different subject. Everything on these pages carries a year label and an Act label for that reason.
This matters more in cross border work than almost anywhere else, because cross border advice is dense with citations and a citation is exactly the thing that broke. The transfer pricing sections moved from 92 to 92F into 161 to 173. The withholding provision for payments to non residents moved from section 195 into the table in section 393. The double taxation relief section moved from 90 into 159.
The forms moved too, and this is the part that catches people out in practice. Form 3CEB became Form 48. Form 10F, the one every foreign payee has to file to claim a treaty rate, became Form 41. Forms 15CA and 15CB became Forms 145 and 146. Form 67, for foreign tax credit, became Form 44.
And one rule number was reused. Under the old Rules, Rule 128 was foreign tax credit. Under the Income-tax Rules 2026, Rule 128 is the general anti-avoidance rule carve out. A reader following a 2025 article that says 'Rule 128' for foreign tax credit now lands on an entirely different subject.
None of this changes what you owe. It changes every reference you use to find out what you owe, and for the next two years you need both sets, because both years are open at the same time.
Five guides, one per question
Each one is written to be read on its own by somebody with the problem it describes. None of them is a substitute for advice on your own facts.
Transfer Pricing Compliance and Documentation
What you have to file and keep when you deal with a related party abroad: the accountant's report that has no threshold at all, the Local File, the Master File that catches far more Indian subsidiaries than people expect, country by country reporting, and the safe harbour that was rewritten this year.
Withholding Tax on Cross Border Payments and Treaty Relief
The payer's problem: deciding whether a payment abroad is chargeable to Indian tax at all, at what rate, what the treaty does to that rate, and what paperwork has to exist before the money leaves. Form 10F, Form 15CA and Form 15CB have all been renumbered.
Permanent Establishment and Taxable Presence in India
When a foreign enterprise becomes taxable in India without ever setting up a company: business connection, significant economic presence, the three kinds of permanent establishment, what the Multilateral Instrument did to your treaty, and how much profit India can attribute once a presence is found.
Cross Border Structuring, Repatriation and Foreign Tax Credit
The outbound side: putting money into a foreign subsidiary under the 2022 overseas investment rules, claiming credit for tax paid abroad, getting profit back to India or out to a foreign parent, and the three rules that constrain how you structure it.
International Tax Disputes and How They Are Resolved
What happens when the department disagrees: the transfer pricing assessment cycle, the Dispute Resolution Panel and its thirty day window, the appeal ladder, mutual agreement procedure between two governments, advance pricing agreements as a way of avoiding the argument entirely, and where the global minimum tax stands for an Indian group.
How an engagement usually runs
1. Map the position
What crosses the border, in both directions, and under what contract. Related party dealings, payments abroad, people travelling, customers and users. Most of the risk in a cross border file is in something nobody thought of as a tax item.
2. Find the exposures
Which payments are chargeable, which relationships are associated enterprises, whether anything creates a taxable presence, and what the treaty actually says rather than what it is assumed to say. This is also where we say plainly what is uncertain.
3. Fix the paperwork before the deadline
Residence certificates, the treaty filing, benchmarking, the accountant's report, the Master File intimation. Almost all of this has a date attached, and several of those dates fall a month before the return.
4. Decide what to lock in
A safe harbour election or an advance pricing agreement buys certainty at a price. Both have to be chosen in advance. We put the trade in front of you with the numbers rather than as a recommendation in the abstract.
5. Hold the line if it is challenged
Representation before the Transfer Pricing Officer, objections to the Dispute Resolution Panel inside the thirty day window, appeals, and mutual agreement procedure where two tax authorities have to talk to each other.
The two readers these pages are written for
If you are still deciding whether and how to come to India, the setup questions are covered separately on our India Entry pages, and the first tax questions on the taxation guide there. These pages pick up afterwards, when the structure exists and has to be run.
An Indian company with something abroad
A subsidiary, a branch, a joint venture, an overseas customer base, or a group company that buys from you or sells to you. The work is transfer pricing, withholding on what you pay out, credit for tax paid abroad, and keeping the foreign entity from accidentally becoming Indian resident.
An Indian subsidiary of a foreign group
Already set up, already filing, and now dealing with the parent on royalties, management fees, cost allocations and secondments. The work is documentation, the treaty position on each payment, and whether anything the parent does in India creates a presence of its own.
Questions we are asked before an engagement starts
We only make one payment abroad a year. Does any of this apply?
Probably some of it. The accountant's report for transfer pricing applies only to dealings with an associated enterprise, but it has no monetary threshold once that condition is met. Withholding and the remittance reporting apply to payments to any non resident, related or not. A single annual software subscription can involve both.
Our foreign parent gave us a tax residency certificate two years ago. Is that enough?
No. A residence certificate has to be valid for the year in which the income arises, and from 1 April 2026 the accompanying filing is made electronically on Form 41, which replaced Form 10F, with the certificate uploaded alongside it. Permanent Account Number is expressly optional on that form, which removes a problem that used to be handled by a series of temporary relaxations. Even a current certificate is not conclusive: since the Supreme Court's decision in Tiger Global in January 2026, the department can look behind it at where the payee is really managed and whether it has substance.
Is the equalisation levy still payable?
No. No equalisation levy is chargeable in India today. The two per cent levy on e-commerce supply ended on 1 August 2024 and the six per cent levy on online advertising ended on 1 April 2025. A large amount of published guidance still describes a live levy, including guidance updated well into this year. Periods before those dates are a different matter: statements, processing, penalties and appeals for them can still be open.
Does India have a global minimum tax?
Not its own. India has not enacted the Pillar Two rules: there is no Indian income inclusion rule and no Indian domestic top up tax. That does not make an Indian headed group with revenue above the threshold safe, because other countries' rules can reach Indian entities. It is covered on the disputes guide.
How long does an advance pricing agreement take?
Historically a long time. The programme has been signing at record volume, 219 agreements in the year to 31 March 2026 and 1,034 since inception, and a faster track has been announced for information technology services. We would not start one on the assumption of a quick answer, and we would tell you what the realistic range looks like for your facts before you commit.
Can you take over an existing dispute?
Yes, and the first question is always where it currently sits and what the next date is. The thirty day window to object to the Dispute Resolution Panel after a draft assessment order is the one that is most often missed. Once it passes the Panel is closed to you, though the ordinary appeal against the final order remains.
Send an enquiry
Tell us what crosses the border and we will tell you what it triggers. If there is a deadline in the next month, say so and we will start there.
This page is general information, not professional advice. Cross-border tax in India is in the middle of the largest transition it has had in sixty years. The Income-tax Act 2025 replaced the Income-tax Act 1961 on 1 April 2026 and renumbered every section; the Income-tax Rules 2026 replaced the 1962 Rules on the same day and renumbered every rule and every form. The 1961 Act still governs the return being filed for FY 2025-26. That means almost every figure and citation has two correct answers depending on the year you are asking about, and a great deal of published material, including material updated this year, gives only one of them. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.