India: what is the tax procedure for nonresident companies operating in the market?

India, year after year, becomes increasingly important in the global economy and, thanks to thethe launch of a series of government reforms aimed at making the country increasingly “business-friendly” and open to international investors, The number of companies that entered the market to do business with you has increased considerably.

In India has a large number of companies From all over the world: many among them Do not have direct locations but have business relationships with local counterparts. Precisely for these types of companies offering their products and services in the Indian market. It is essential to be aware of the regulations, obligations, and procedures that characterize tax payments. On revenues made in Indian territory.

An important new development that recently took effect in the country, concerns the’Obligation to file tax returns also for foreign companies/non-resident individuals which are in possession of the PAN number (Permanent Account Number) and who have received money for the sale of their services in India in the fiscal year 2017/2018 (the PAN, for those who are not aware, is a 10-digit alphanumeric code, issued by the Indian Income Tax Department, useful for tracking all transactions of those operating in India from a tax perspective and an indispensable tool for a company that wants to do business in India).  

Under such legislation, the taxpayer is responsible for paying taxes on income earned in India. (and therefore has the obligation to file the tax return) but you will not have to pay additional taxes, as TDS (Tax Deduction at Source) will have already been deducted by the Indian client at the time of payment. The same client will then be responsible for notifying the Indian tax authorities of this deduction, specifying the PAN of the non-resident taxpayer. Subsequently, the Indian authorities will conduct a check to verify the regularity of the entire process: in case of any problems, the local tax office will send a notification to the foreign company, specifying that legal action may be taken if tax returns are not filed.

India a market that cannot be called simple and deserves detailed analysis before approaching. It is precisely by virtue of these reasons It is advisable to rely on experts who know the subcontinent well: Octagona, thanks to its direct offices in New Delhi, Pune and Bangalore and its team of Italian and Indian experts, can you provide whether the service related to obtaining the PAN both that relating to the preparation of the tax return.

If you want to know more about our activities, please contact the telephone number 059.9770184 or send an e-mail to the address [email protected]:  you will receive all the information you need.