International Tax Services in India | Savlana Init

International Tax & Estate · Advisory

International Tax Services — Two Systems. One Position.

Cross-border income is taxed twice unless someone actively stops it. Treaty analysis, withholding, permanent establishment and credit — handled as one position rather than two returns.

Cross-border tax is not simply domestic tax applied to a foreign fact pattern. It sits at the intersection of the charging provisions in Sections 4, 5 and 9 of the Income Tax Act, the withholding machinery in Section 195, the treaty network operating through Sections 90 and 90A, the transfer pricing code in Chapter X, and the exchange control framework under FEMA. Each has its own definitions, its own thresholds and its own filings, and a position that is correct under one can be a contravention under another.

Section 9 is where most disputes begin. It deems income to accrue or arise in India in defined circumstances — business connection, income from property or assets in India, capital gains on Indian assets, interest, royalty and fees for technical services paid by residents, and, since the introduction of significant economic presence, certain digital and remote engagement with the Indian market. Whether a foreign enterprise has a permanent establishment in India, and how much profit is attributable to it, is the single most litigated question in Indian international tax, and it is usually decided by facts created long before anyone considered the tax consequence.

The remedial side is equally technical. Treaty relief requires a Tax Residency Certificate, an electronically filed Form 10F and, where relevant, a no-permanent-establishment declaration, and the treaty applies only where it is more beneficial than domestic law. Foreign tax credit requires compliance with Rule 128 and the filing of Form 67 within the prescribed time, and credit is routinely denied for nothing more than a late form. Outward remittances require Form 15CA and, in most substantive cases, a chartered accountant’s certificate in Form 15CB. We handle the analysis and the paperwork as one exercise, because in practice they fail together.

Our International Tax Services

Treaty Analysis and Planning

Article-by-article analysis of the applicable Double Taxation Avoidance Agreement, tie-breaker determination and identification of the most beneficial position.

Section 195 Withholding Advisory

Determination of the correct rate on payments to non-residents, including royalty, fees for technical services, interest, dividends and capital gains.

Permanent Establishment Review

Assessment of fixed place, agency, service and construction permanent establishment exposure, and profit attribution where a PE exists.

Form 15CA and 15CB Certification

Chartered accountant certification and portal filing for outward remittances, matched so that the authorised dealer processes without query.

Foreign Tax Credit and Form 67

Computation of credit under Rule 128 and timely filing of Form 67 with supporting evidence, which is where most credit claims are lost.

Transfer Pricing Compliance

Benchmarking of international transactions, accountant’s report in Form 3CEB, and Master File and Country-by-Country reporting where thresholds are crossed.

Section 197 Certificates

Applications for lower or nil deduction certificates so that withholding matches the real liability rather than the gross payment.

Cross-Border Dispute Support

Representation in assessment and appeal on treaty, permanent establishment, royalty and fees for technical services characterisation disputes.

Our Process

Transaction Mapping

We map the cross-border flows — who pays whom, for what, from where, and under which contract — because characterisation follows the facts, not the invoice description.

Charge and Treaty Analysis

Taxability is tested under Sections 5 and 9, then under the applicable treaty, and the more beneficial position is identified with reasons recorded.

Withholding Determination

The correct deduction rate is fixed, treaty documentation is assembled, and a Section 197 application is made where the statutory rate overshoots.

Compliance Execution

Forms 15CA, 15CB, 10F, 67 and 3CEB are prepared and filed within their respective deadlines, which differ and are unforgiving.

Documentation and Defence

A contemporaneous file is built — agreements, certificates, benchmarking and correspondence — so the position can be defended years later.

Why It Matters

✓One coherent position across both jurisdictions, not two separate ones

✓Withholding set at the treaty rate rather than the domestic default

✓Permanent establishment exposure identified before it crystallises

✓Foreign tax credit preserved through timely Form 67 filing

✓Section 197 certificates used to unblock over-withheld funds

✓Transfer pricing documentation ready before the notice arrives

✓Remittance certification that banks accept without repeated queries

✓A contemporaneous file that stands up in assessment and appeal

Frequently Asked Questions

Whenever a person pays a non-resident any sum chargeable to tax under the Act. The obligation arises at credit or payment, whichever is earlier, and it applies to the sum chargeable rather than the whole payment only where a determination has been obtained. Failure to deduct exposes the payer to disallowance of the expenditure, interest and penalty, and to being treated as an assessee in default.

Broadly a fixed place of business through which the enterprise operates, a dependent agent habitually concluding contracts, a construction or installation site exceeding the treaty threshold, or the furnishing of services in India beyond a specified duration where the treaty contains a service PE clause. It is decided on facts — employee presence, premises, decision-making and contract conclusion — and rarely on how the arrangement is labelled.

Under Rule 128, credit for foreign tax is available against Indian tax on the doubly taxed income, limited to the lower of the foreign tax paid and the Indian tax attributable to that income. Form 67 must be filed with a statement of foreign income and evidence of tax payment. Late filing is the single most common reason credit is denied, so the form should be treated as a deadline, not a formality.

Royalty broadly covers consideration for the use of, or right to use, intellectual property, know-how, equipment and similar rights. Fees for technical services covers consideration for managerial, technical or consultancy services. The distinction matters because rates, treaty definitions and the make-available condition in several treaties differ, and misclassification changes both the withholding rate and the treaty relief available.

Yes. Section 90(4) requires a non-resident claiming treaty relief to obtain a certificate of residence from the government of the country of residence, and Section 90(5) read with Rule 21AB requires additional information in Form 10F, which is now filed electronically. Many payers also require a declaration confirming beneficial ownership and the absence of a permanent establishment in India.

Where an enterprise enters into an international transaction with an associated enterprise, the arm’s length price must be determined and an accountant’s report in Form 3CEB filed. Detailed documentation is required once the aggregate value of international transactions crosses the prescribed threshold, and Master File and Country-by-Country reporting apply to larger multinational groups meeting their own separate thresholds.

Dealing with income or payments across two tax systems?

Send us the contract and the payment flow. We will determine taxability under the Act and the treaty, fix the withholding, and complete the certification your bank needs.