amit arun associates
   
Home Contact Us Site Map
Home about us Latest News Contact us

Fixed Assets Verification Services

Payroll Processing Service

Employee Benefit Administration

Tax Consulting

Foreign Direct Investment

File GST & E-TDS Returns
 
 
 
 
 
 

Reimbursement of seconded employee salary

Posted @ February 15, 2012, 10:36 pm under (EXPAT TAXATION)

The AAR held in case of Verizon Data Services India Private Limited (A.A.R. Nos. 865 of 2010) - that the seconded personnel are employees of a foreign company and render managerial services to the Applicant. Hence, the payments made would be in the nature of income and would be regarded as fees for included services under the provisions of the India – US Double Taxation Avoidance Agreement (US DTAA) as well as fees for technical services under the provisions of the Indian Tax laws.

Furthermore, the ‘make available’ criteria, as stipulated in the US DTAA, are not required to be satisfied in the case of managerial services. Hence, taxes were required to be withheld on the Applicant’s payments to its US affiliate. Payment made by resident company on account of reimbursement of salary cost and other benefits of the expatriate employees to non-resident for rendering managerial and other related services is taxable as “Fees for Included Services (FIS)” at the rate of 20%.

 


Website Designing  Company Image Map
Contact us Contact us Disclaimer Privacy Policy Site Map