International Taxation Services

As businesses expand across borders, they encounter overlapping and sometimes conflicting tax rules in every jurisdiction they touch. International taxation deals with how income earned across multiple countries is taxed, how double taxation avoidance agreements (DTAAs) allocate taxing rights between countries, and how withholding tax obligations arise on cross-border payments. In the Indian context, these rules affect outbound investors setting up subsidiaries or branches overseas, as well as inbound multinationals establishing a presence in India, and getting the analysis wrong can trigger double taxation, penalties, or protracted litigation.

Why This Matters

Cross-border transactions are subject to intense scrutiny by tax authorities on both sides of a transaction, and an incorrect treaty position or an unrecognised permanent establishment can result in significant additional tax demands, interest, and reputational damage. Businesses that plan their international structures proactively, rather than reactively defending positions after an assessment, are far better placed to manage their effective tax rate and avoid protracted disputes with revenue authorities.

How We Help

Cross-Border Tax Structuring

We assist businesses in structuring outbound investments, overseas subsidiaries, branch offices, and holding company arrangements in a manner that is tax-efficient and compliant with both Indian and foreign regulations. This includes evaluating the choice of jurisdiction, entity type, and financing structure to minimise leakage while remaining within the bounds of anti-avoidance provisions.

DTAA Interpretation and Application

India has an extensive network of double taxation avoidance agreements, and correctly applying the relevant treaty article to a given stream of income can materially reduce the overall tax burden. We help clients determine treaty eligibility, obtain tax residency certificates, and apply the appropriate treaty provisions to royalties, fees for technical services, interest, dividends, and business income.

Withholding Tax Advisory

Payments to non-residents typically attract withholding tax obligations under Indian law, and the applicable rate depends on the nature of payment, the recipient's residency, and any beneficial treaty rate. We assist with determining the correct withholding rate, obtaining lower or nil withholding certificates where applicable, and ensuring timely compliance with reporting requirements such as Form 15CA and 15CB.

Permanent Establishment Risk Assessment

The existence of a permanent establishment (PE) in India can expose a foreign enterprise's business profits to Indian tax, even without a formal subsidiary being set up. We review business models, employee travel patterns, agency arrangements, and contract structures to assess PE exposure and recommend changes that reduce the risk of an adverse determination during assessment.

Who Needs This

• Indian companies expanding operations overseas through subsidiaries or branches
• Foreign multinationals setting up liaison offices, branches, or subsidiaries in India
• Businesses making or receiving cross-border payments for services, royalties, or licensing
• Companies with expatriate employees or personnel travelling frequently between jurisdictions

Our Approach

We combine a thorough understanding of Indian tax law with practical knowledge of how treaty provisions are interpreted by courts and tax authorities, so that the advice we give holds up under scrutiny. Rather than offering generic treaty analysis, we look closely at the specific facts of each transaction, the commercial rationale behind the structure, and the documentation available to support the position taken, ensuring our clients are prepared well before any assessment or audit begins.

Get in Touch

To discuss how we can support you with international taxation services, write to us at info@agarwalurs.com.