How do I compare a fixed fee against an hourly quote?
Ask the hourly firm for its estimate of hours for a file like yours, in writing, and ask what happens to that estimate if a year has to be reconstructed. Multiply, then compare against the fixed number. The comparison people usually make — rate against fee — is not a comparison of anything.
Does a fixed fee mean less time on my file?
It means the time is not the product. The scope states what will be prepared and reviewed, and the work is not finished until it is right — the review step exists before you approve, so a corner cut is a corner you would see.
Which model do most cross-border clients prefer?
Almost universally the fixed fee, and the reason given is rarely the price. It is that a two-country file already involves enough uncertainty without adding uncertainty about the bill.
Why does asking my accountant a question add to the bill?
Under an hourly model it is not a separate decision to bill you for it. Time recorded is time invoiced, and a call is time. The effect is predictable and bad: people stop asking, and the questions they stop asking are the cheap ones, the ones that would have surfaced a second account or a missed year early. Under a fixed fee the questions cost nothing to ask, because the price was set against the work to be produced rather than the hours spent producing it. That changes what a client tells you, which on a two-country file changes the return.
Is an hourly estimate from an accountant binding on the firm?
Usually not, and the wording is worth reading closely. An estimate describes what a firm expects a file like yours to take. It is not a commitment to that number, and the invoice is generally calculated from recorded time regardless. That is not dishonest, but it does mean the risk of the file being harder than it looked sits with you. The question to ask in writing is what happens to the estimate when a year has to be reconstructed, because on cross-border work that is the branch where estimates and invoices part company.
What should I ask before accepting an hourly tax quote?
Three things, in writing. How many hours a file like mine has taken your firm before. What the rate covers and what is billed separately — scoping, calls, review by a second person, correspondence with a tax authority. And what happens to the estimate if an additional year or jurisdiction appears. A firm that has done this work knows the answers and can give them without much difficulty. A firm that will not put them in writing is telling you something useful about how the final number gets built.
When is hourly billing actually the better structure for a client?
When the work has no definable output. An advisory question that will develop over months alongside a transaction cannot be scoped honestly, and pretending otherwise produces a fixed fee padded to cover the unknown, which the client pays for whether or not the unknown arrives. The other case is a dispute whose length is set by how a tax authority behaves — someone else's conduct driving the cost. For anything with a named deliverable, a return, a form, a certificate application, a documentation file, a fixed fee can be quoted and the client is better off with one.
Who pays for the research if my tax position is unusual?
Under a fixed fee, we do. A treaty position that has to be worked through, a form whose interaction with another country's filing is not obvious, an arrangement that does not match the standard pattern — the time that takes sits inside the quoted scope, because the scope was a description of the result rather than of the effort. Under an hourly model research hours are hours like any others, which means the more unusual your facts, the more that model costs you. Cross-border files are disproportionately the unusual ones.
How can a firm quote a fixed price without seeing my papers?
It cannot, which is why scoping comes first and why a number quoted before anyone has asked about your years, countries and accounts is not really a quote. What we do is ask a structured set of questions about what has to be filed, for which years, in which jurisdictions, and what documents exist. That is enough to price most engagements accurately. Where it is not, because the answer depends on something nobody can see yet, we say so and price the part that can be defined rather than quoting a number and revisiting it later.
On an hourly engagement, when do you learn the price?
At the end, which is the whole objection. An hourly quote prices the adviser's time rather than your outcome, so the number arrives after the decisions have been made. A fixed price is agreed before the work begins, which puts the risk of a file being messier than expected on us rather than on you.
Do NRIs pay tax on money sent to India?
Sending your own funds to India is a transfer of capital, not income, so the remittance itself is not taxed. What is taxable is income the money then earns in India — interest, rent, capital gains — under the rules for the account type it sits in. Sending money out of India is the direction that needs certification before the bank will act. See NRE, NRO and FCNR accounts.
