Our consultants sit on a client site abroad — do we owe tax there?
Possibly. Placing your own personnel on a client's premises in another country is the fact pattern most treaties address through a services provision: where your people perform services in that country on a project, or on a set of connected projects, over a sustained period, the firm is treated as having a taxable presence even without an office. The measure is normally the presence of your personnel rather than the client's own activity, and days spent by different consultants on the same engagement are usually added together. The practical consequence is a corporate filing and an allocation of profit to that country.
Who is responsible when a client withholds on our placement fees?
Commercially the client deducts it, but the tax is yours. Withholding is a collection mechanism applied to your income, and the firm bears it unless the contract shifts the cost. Two things follow. Where a treaty limits or removes the other country's right to tax your fee, the relief normally has to be established with the payer before payment, using documentation the payer can rely on; afterwards it becomes a repayment claim against that country's revenue authority instead, which takes far longer. And where the deduction was correct, the route to recovery is the credit in your own corporate return, which depends on the income being foreign-sourced under your home rules. A gross-up clause moves the cost but does not change whose tax it is.
We never registered in the countries our consultants worked in — what now?
Start by establishing the facts rather than the liability. For each country, work out which consultants were present, on what dates, on which engagements, and who paid them. That record decides everything else: whether a services presence arose, from what date, whether payroll was due from the first day, and which years remain open. Most countries have a route for coming forward before they contact you, and the terms are materially better than those available once an enquiry has started. The order of work matters, because a disclosure made before the facts are settled tends to be reopened. We rebuild the presence record first and file second.
Does a service permanent establishment depend on the client or on us?
On you. The services provision looks at your enterprise carrying on business in that country through your people. The client's own tax position is largely irrelevant to it, and a client with no exposure of its own can still be the site of one for its supplier. That is why staffing is treated differently from a straightforward sale of goods or a licence of software: what is being supplied is people, and the people are physically there. It also means the exposure travels with the engagement rather than with the contract's governing law or the place the invoice happens to be raised from.
Do we have to run payroll where a consultant is placed?
Often yes, and the question usually arises before the corporate one. Employment withholding in most countries attaches to work performed within the territory, and it can apply from the first day even where a treaty ultimately relieves the employee from tax there. Where the firm has a taxable presence in that country, or where the client is treated as the economic employer because it directs the consultant's daily work, the relief that would otherwise protect a short assignment tends to fall away. The two questions — is the firm taxable, is the payroll due — have different tests and different start dates, and each has to be answered separately for every country a consultant is placed in.
Can we structure a placement so it does not create a presence abroad?
Sometimes, but not by drafting alone. What decides the outcome is the duration and continuity of your people's presence, whether they work under your direction or the client's, and whether anyone there habitually concludes contracts for the firm. Those are facts, and revenue authorities test them against timesheets, site records and immigration data rather than against the contract. There are legitimate approaches — shorter rotations, engaging an employer of record in that country, or simply registering and filing properly — and the right one depends on how long the client relationship is expected to run. A structure adopted after a presence has already arisen does not undo the earlier years.
Is my Indian provident fund or PPF still tax-free now that I live abroad?
The exemption is an Indian one, and it does not travel. Your new country of residence taxes worldwide income under its own rules, and several — the United States in particular — may treat the annual growth in a foreign retirement or savings plan as currently taxable and separately reportable, whether or not you withdrew anything. So an account that is genuinely tax-free in India can be a taxable, reportable asset where you now live. See Indian pensions received abroad.
Do I get credit for all of the foreign tax I paid?
Only up to your own country's tax on that same income, and only for tax you were legally obliged to pay. Two consequences follow. Living somewhere that taxes you more heavily than your residence country does leaves an excess that becomes a carryover rather than a refund. And withholding suffered above the treaty rate is not creditable — the route back to that money is a refund claim in the country that took it. See claiming the credit.
