The moment money moves across the border, three regimes engage at once: the Income-tax Act decides whether tax must be withheld and at what rate, the treaty may reduce that rate if it is properly claimed, and FEMA governs whether the remittance is permitted and how it must be reported. Missing any one of them turns a routine payment into a problem.
For foreign-owned Indian entities and Indian groups with overseas subsidiaries, the recurring exposure is transfer pricing — related-party transactions have to be at arm's length and documented before the deadline, not reconstructed afterwards.
What we handle
- Withholding on foreign remittances under section 195, and whether the payment is chargeable at all
- Royalty, fees for technical services, interest and business profits — characterisation before rate
- Treaty positions, tax residency certificates, Form 10F and beneficial ownership
- Permanent establishment exposure for foreign entities operating in India
- Form 15CA and Form 15CB certification for outward remittances
- Transfer pricing — benchmarking, documentation and Form 3CEB
- Related-party arrangements: management fees, cost allocation, intra-group loans and guarantees
- FEMA and FDI reporting — FC-GPR, FC-TRS, ODI and the annual return on foreign liabilities and assets
- Equalisation levy and the taxation of digital transactions, where they apply
- Cross-border structuring reviewed for substance, not just form
What you supply
- The agreement or contract governing the cross-border payment
- Invoices raised by the foreign party
- Tax residency certificate and Form 10F of the recipient
- No-permanent-establishment declaration, where relied on
- Group structure chart and shareholding pattern
- Related-party transaction summary for the year, with the financials of each entity
- Prior years' Form 3CEB and transfer pricing study, if any
- FIRC and bank documents for inbound investment already received
For a remittance that has to go out this week, send the agreement and the invoice first — the certification can usually be turned around quickly once the characterisation is settled.
How the engagement runs
Characterise, then certify, then report
STEP 01
Transaction reviewed
We read the actual agreement and decide what the payment is, because the rate follows from the characterisation.
STEP 02
Treaty position taken
Applicable rate confirmed against the treaty, with the documentation needed to support it.
STEP 03
Certified and remitted
Form 15CB issued and 15CA filed, so the bank can release the remittance.
STEP 04
Reported
FEMA filings and, where applicable, transfer pricing documentation and Form 3CEB completed before the deadline.
Before you call
Questions we are asked about this
Do we have to withhold tax on every payment to a foreign vendor?
No — only where the payment is chargeable to tax in India. That is the first question, and it is answered from the agreement rather than the invoice description. Where it is chargeable, the treaty often reduces the rate below the Act's rate, provided the recipient's documentation is in order.
Our foreign parent charges us a management fee. Is that a problem?
Not in itself, but it is a related-party transaction, so it has to be at arm's length, supported by evidence that the services were actually rendered and benefited you, and disclosed in Form 3CEB. Management fees with thin documentation are among the most commonly disputed items.
When does a foreign company create a permanent establishment in India?
It depends on the facts — a fixed place of business, a dependent agent concluding contracts, or personnel present beyond the treaty threshold can each create one. It is worth reviewing before the arrangement is set up rather than after the first assessment.
Send us the agreement behind the payment
You do not have to know the name of the form. Describe the situation and we will identify the filing, the authority and the realistic timeline before you pay anything.