International Taxation

What International Taxation Covers — Complete Overview

International taxation refers to the tax rules and regulations governing cross-border income, foreign investments, international transactions, overseas operations, and global business structures. It influences how income is taxed in the source country, the residence country, and how businesses can legally avoid double taxation.

Key components of international taxation include Double Taxation Avoidance Agreements, global transfer pricing rules, withholding tax regulations, Permanent Establishment assessments, treaty benefits, and global reporting frameworks such as FATCA, CRS, and BEPS. These rules determine how royalties, interest, dividends, technical services, software payments, secondments, and related-party transactions are taxed across countries.

This framework is critical for multinational groups, foreign companies operating in India, Indian companies expanding abroad, exporters, digital businesses, NRIs, expatriates, and cross-border investors. With global tax laws evolving rapidly, businesses rely on accurate interpretation and structured compliance to avoid disputes, prevent double taxation, and maintain tax efficiency across jurisdictions.

Cross-Border Tax Advisory and DTAA Analysis

Cross-border transactions often trigger tax exposures in multiple countries, making accurate treaty interpretation essential for avoiding double taxation and determining where income should be taxed. AccounTX evaluates every international transaction through the lens of India’s DTAA network to ensure correct classification, taxability, and compliance.

A key component of cross-border tax planning is assessing Permanent Establishment exposure. Activities such as dependent agent functions, fixed office use, secondments, and onsite project execution can create unintentional PE in India or abroad. When a PE is triggered, additional tax filings and profit attribution rules apply. AccounTX performs detailed PE risk assessments so businesses operate confidently without unexpected liabilities.

Our DTAA analysis ensures clients claim the correct treaty benefits for royalties, interest, dividends, Fees for Technical Services, and business income. We manage end-to-end processes including TRC requirements, Form 10F, no-PE declarations, and LDC/NIL withholding applications.

Realistic Scenarios We Support

• Cross-border royalty or license fee payments requiring treaty-based rate reduction
• FTS payments where determining “make available” conditions decides taxability
• Secondment arrangements where characterisation determines whether a PE is created
• Offshore service contracts requiring income attribution analysis
• Global shared-service models involving intercompany charges

With structured documentation and clear tax positions, AccounTX helps businesses minimise withholding tax, maintain compliance, and avoid disputes during assessments.

Transfer Pricing Compliance and Documentation

Transfer Pricing is one of the most scrutinised areas for businesses with international transactions. India follows OECD-aligned TP rules under Sections 92 to 92F, requiring all associated-enterprise transactions to be at arm’s length and supported by comprehensive documentation.

AccounTX helps businesses meet all regulatory requirements, including the preparation of Local Files, Master Files, and benchmarking studies. Our documentation covers functional analysis, economic analysis, risk evaluation, intercompany pricing models, and industry benchmarking using globally recognised databases.

Our Compliance Support Includes

• Identification of international and specified domestic transactions
• Maintenance of contemporaneous documentation
• Preparation of Form 3CEB certified by a Chartered Accountant
• Benchmarking studies to establish arm’s length pricing
• Transfer pricing planning for cost allocations, service charges, IP licensing, and secondments

During TP audits, authorities assess pricing structures, operating margins, profit attribution, and intercompany agreements. AccounTX provides representation support, prepares rebuttals, and defends TP positions with evidence, ensuring clients remain compliant while avoiding adjustments and penalties.

Our approach ensures businesses meet Indian TP thresholds, align with OECD guidelines, and maintain risk-proof documentation for all cross-border transactions.

Withholding Tax Advisory for Cross-Border Payments

Cross-border payments often attract withholding tax under Indian tax law, and getting the rate wrong can result in penalties, excess tax outflow, or treaty non-compliance. AccounTX helps businesses correctly determine the applicable WHT rate for payments such as royalties, interest, technical services, software licences, dividends, and contract services. Each category has its own domestic rate and often a lower treaty rate, which must be analysed carefully before remittance.

Our Advisory Support Covers

• Transaction-wise WHT classification under the Income Tax Act
• Treaty rate analysis for more than 90 Indian DTAAs
• Evaluation of “make available” conditions relevant to Fees for Technical Services
• Structuring payments to reduce withholding exposure within legal frameworks
• Preparation of Form 15CB and review for Form 15CA filing

We also support clients in obtaining Lower or NIL Withholding Certificates from the Income Tax Department when the treaty rate or business model justifies reduced tax outflow. This includes preparing applications, documentation, projections, past compliance review, and liaison with assessing officers.

With AccounTX, businesses ensure correct tax deduction, avoid overpayment, streamline remittances, and maintain complete compliance for all outward cross-border payments.

Global Tax Compliance and Reporting

Cross-border businesses must comply with a wider framework of global reporting standards beyond domestic income tax. AccounTX helps organisations meet these obligations with accurate reporting, well-maintained documentation, and proactive compliance checks.

Our Support Covers

• FATCA compliance for foreign financial account reporting
• CRS reporting for global financial asset disclosure
• BEPS Action Plan requirements impacting digital and multinational businesses
• Country-by-country reporting where applicable
• Foreign tax credit computation
• Global income reconciliation and reporting

Improper reporting often leads to mismatches during tax assessments or cross-country information exchanges. AccounTX ensures each filing meets jurisdictional rules, matches local statutory filings, and prepares businesses for global tax transparency standards with complete accuracy.

Expatriate and NRI Taxation

Expatriates and NRIs face unique tax challenges in India due to residency rules, foreign income considerations, and cross-border reporting obligations. AccounTX helps individuals and global employers navigate these complexities with accurate tax planning and full compliance support.

Understanding Residential Status

Residential status determines how income is taxed in India. AccounTX evaluates physical presence, employment arrangements, and tie-breaker rules under DTAAs to classify individuals accurately as resident, RNOR, or non-resident.

Taxability of Foreign Income

AccounTX assesses taxability of salary, ESOPs, bonuses, investment income, and overseas assets while applying treaty relief to avoid double taxation.

Secondment Tax Structuring

Secondment cases are scrutinized for PE risk and salary taxation. AccounTX structures secondment models, prepares documentation, and ensures compliant payroll treatment.

NRI Tax Filing and Compliance

• India tax return filing
• Capital gains reporting
• TDS refund claims
• Treaty benefit documentation

Repatriation and Remittances

• Tax clearance certificates
• Repatriation of sale proceeds
• FEMA aligned banking compliance

Foreign Asset Reporting

• Schedule FA reporting
• Global income disclosures
• Penalty avoidance for incorrect reporting

AccounTX ensures expatriates and NRIs stay compliant, reduce tax leakage, and manage global income efficiently with complete regulatory clarity.

FEMA, RBI, and Cross-Border Regulatory Compliance

Foreign businesses operating in India must comply with FEMA and RBI regulations governing foreign investment, equity transfers, capital flows, and outbound investments. AccounTX provides end-to-end support to ensure every cross-border transaction meets regulatory expectations.

Share Subscriptions and Capital Inflows

We manage FEMA documentation, valuation alignment, and timely RBI reporting for foreign investment inflows.

Equity Transfers

AccounTX ensures compliance with pricing guidelines and documentation norms for resident–non-resident share transfers.

FC-GPR and FC-TRS Filings

• FC-GPR for foreign share subscriptions
• FC-TRS for share transfers between residents and non-residents

ECB Compliance

• ECB eligibility verification
• Loan registration
• Compliance reporting

ODI Compliance

• Form ODI filings
• Capital infusion documentation
• APR reporting

Common FEMA Risks

• Incorrect FDI route classification
• Delayed FC-GPR or FC-TRS reporting
• Non-compliant share valuation
• Hidden PE risk from secondments
• Sectoral cap violations
• Improper documentation of capital flows

AccounTX helps businesses operate confidently within India’s foreign exchange regulatory environment with structured guidance, accurate documentation, and proactive compliance tracking.

International Tax Structuring and Advisory

Effective tax structuring is essential for businesses operating across multiple jurisdictions. AccounTX provides strategic international tax advisory that aligns operational goals with global tax efficiency while ensuring compliance with Indian and foreign regulations.

Entity Selection for Global Operations

We evaluate business models, ownership, and revenue flows to select the best structure including subsidiaries, branches, liaison offices, or joint ventures.

Holding Company Models

AccounTX assists with selecting tax-efficient jurisdictions by analyzing treaty benefits, capital gains exemptions, repatriation rules, and regulatory landscape.

IP Structuring

We support strategic placement of intellectual property in tax-efficient jurisdictions with R&D incentives and compliant IP protection models.

Inbound and Outbound Investment Planning

AccounTX structures investments to optimize tax exposure for both inbound and outbound flows.

Hybrid Entities and Treaty Access

We evaluate eligibility for treaty access and prevent denial of benefits due to anti-abuse rules.

Tax-Efficient Repatriation Planning

• Dividend planning
• Interest and royalty models
• Capital reduction
• Buy-back structures
• Treaty-based optimization

This helps businesses reduce tax leakage and maintain global cash-flow efficiency while staying compliant.

Audit Representation and Dispute Resolution

Cross-border transactions often attract greater scrutiny from tax authorities. AccounTX supports businesses through every stage of tax audits, assessments, and disputes to ensure strong representation and timely resolution.

Support During Tax Audits

Our team manages end-to-end audit processes, responds to notices, prepares documentation, and addresses technical queries raised by authorities.

Transfer Pricing Disputes

AccounTX assists companies facing disputes regarding pricing methodologies, margins, and benchmarking adjustments proposed by tax officers.

Withholding Tax Disputes

We support cases where authorities challenge treaty eligibility, classification of income, or differential withholding tax rates.

DTAA Interpretation Disputes

AccounTX defends positions relating to PE status, “make available” conditions, dependent agent classification, and benefit eligibility.

Appeals and Assessments

• First-level assessments
• CIT(A) filings
• ITAT preparation and coordination through legal experts
• Documentation, submissions, and strategic representation

With a structured compliance approach, AccounTX helps businesses reduce litigation exposure and achieve favourable outcomes in complex global tax matters.

Industry-Specific International Tax Support

AccounTX provides domain-aligned support tailored for unique cross-border requirements across industries. Each sector faces specific tax challenges, and our models ensure compliant, optimised operations.

SaaS and Technology

We support issues around royalty classification, server-based PE, subscription revenue taxation, and transfer pricing for global contracts.

eCommerce

AccounTX handles GST on digital supplies, WHT on marketplace fees, logistics-based transfer pricing, and treaty-based tax efficiency.

Manufacturing

We assist with PE risk from installation or commissioning activities, intercompany purchase structures, customs implications, and TP compliance.

IT and ITES

AccounTX manages cost-plus models, secondment taxation, arm’s length pricing, and global service contract compliance.

Consulting

We address FTS classification, PE exposure, resident status challenges, and treaty benefit claims for advisory service organisations.

Exporters

AccounTX provides advisory for GST refunds, foreign remittances, FEMA compliance, and cross-border contracts.

Foreign Subsidiaries

We manage end-to-end India compliance, DTAA optimization, transfer pricing, and WHT planning for subsidiaries of global businesses.

Investment Firms

AccounTX supports SPV structuring, capital gains planning, fund flow taxation, and treaty interpretation.

How AccounTX Works — Process and Engagement Flow

AccounTX follows a structured, transparent workflow that simplifies international taxation while reducing risks and maintaining compliance at every stage.

Step 1: Discovery and Documentation Review

We review business structure, contracts, global operations, related-party transactions, remittances, and historical filings to identify exposure.

Step 2: Exposure Assessment

AccounTX evaluates DTAA interpretation, withholding tax categories, PE risk, foreign tax credits, and FEMA obligations.

Step 3: Advisory and Structuring

We deliver strategic recommendations covering treaty optimisation, repatriation planning, TP policies, and compliant documentation frameworks.

Step 4: Compliance Filings

AccounTX manages Form 3CEB, transfer pricing documentation, WHT filings, DTAA forms, FEMA filings, and global reporting requirements.

Step 5: Representation and Support

We represent clients before tax authorities during audits, assessments, and inquiries on international tax matters.

Step 6: Quarterly and Annual Review

AccounTX conducts periodic reviews to ensure global tax compliance aligns with evolving regulations and treaty updates.

Technology and Tools Used

AccounTX integrates secure, advanced tools to deliver accurate, compliant, and efficient international tax services.

Tax Research Databases

We use global tax research platforms to interpret DTAAs, case laws, and cross-country notifications.

Documentation Software

Our tools maintain TP files, benchmarking analysis, DTAA logs, and audit-ready digital folders.

Compliance Trackers

AccounTX implements automated due-date trackers for WHT filings, FEMA reporting, and international compliance tasks.

Encrypted File Management

All sensitive tax data is managed through encrypted, access-controlled systems.

Automated Treaty Lookup Tools

We use automated tools to interpret treaty provisions accurately for planning and compliance.

Workflow Automation

AccounTX uses digital workflows for filing processes, approvals, and documentation updates to ensure accuracy and timeliness.

Case Studies

Case 1: DTAA Benefit Optimization for a US SaaS Company

AccounTX applied the India–US DTAA to reduce withholding tax significantly by preparing proper documentation and treaty justification.

Case 2: Transfer Pricing Documentation Preventing Large Penalty

We prepared detailed TP files and benchmarking for a global IT firm, leading to acceptance of arm’s length pricing during audit.

Case 3: Lower Withholding Tax Certificate for a European Engineering Firm

AccounTX secured a Lower/NIL WHT certificate, improving liquidity and project profitability.

Case 4: NRI Tax and Repatriation Support

We clarified residency, filed returns, managed capital gains, and handled repatriation under FEMA without triggering penalties.

Why Choose AccounTX

AccounTX brings specialised strength across global and Indian taxation, combining DTAA expertise, transfer pricing proficiency, WHT advisory, expatriate taxation, and FEMA compliance under one umbrella. Businesses benefit from sector-specific insight, structured execution, audit-ready documentation, and a dedicated international tax desk that ensures compliance and tax optimisation across jurisdictions.

Frequently Asked Questions

1. What is DTAA and how does it work

A DTAA prevents double taxation by allocating taxing rights and reducing withholding taxes when proper documentation is maintained.

2. When is transfer pricing documentation required

It is mandatory for all international transactions with associated enterprises. It must be prepared before return filing to avoid penalties.

3. How is foreign tax credit claimed

Foreign tax credit is claimed using Form 67 along with supporting documents for income and tax paid abroad.

4. What triggers Permanent Establishment

PE may arise through fixed place business, dependent agents, onsite personnel presence, or project duration thresholds.

5. How can withholding tax be reduced legally

By applying DTAA rates, correct classification, and obtaining Lower/NIL deduction certificates.

6. Do foreign companies need to file returns in India

Yes, if they earn income taxable in India including royalty, FTS, interest, or PE-attributable income.

7. How is residency determined for expatriates

Based on physical presence and tie-breaker rules under DTAA.

8. What documents are needed for cross-border filings

Contracts, invoices, TRC, Form 10F, bank proofs, withholding records, and foreign tax evidence.

9. How does India tax global income

Residents are taxed on worldwide income. Non-residents only on India-sourced income.

10. What is Form 15CA/CB

It certifies taxability and withholding for foreign remittances.

11. How does AccounTX support foreign subsidiaries

We offer end-to-end advisory for structuring, TP, WHT, FEMA, payroll, and global compliance.

12. Do NRIs need to file returns

Yes, when income exceeds exemption or TDS refunds are required.

13. Are cross-border transactions always taxable

Most attract withholding unless exempt under DTAA or classified as non-taxable business income without PE.

14. What is BEPS

Global framework to prevent profit shifting. Businesses must align documentation with economic substance.

15. How can AccounTX help

We provide complete cross-border advisory, documentation, compliance filings, audit representation, and tax optimisation.

AccounTX offers structured, end-to-end international tax support for businesses, investors, NRIs, and foreign subsidiaries operating across jurisdictions.