Indian company setting up in Canada — what part of this actually needs a professional?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: funding choice drives withholding on the way back: dividends, interest and service fees are treated differently by the treaty.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
Does my Indian company need a Canadian subsidiary or can we just invoice?
Invoicing from India works until the Canadian activity starts to look like a business carried on in Canada — people on the ground, a fixed place, contracts concluded there. At that point the question is no longer whether to incorporate, but whether the Indian company itself already has a Canadian filing obligation. A subsidiary is the cleaner answer when customers want a local counterparty, staff are hired locally, or the group wants Canadian banking and payroll in its own name. What it buys is separation. What it costs is a full Canadian filing calendar, and transfer pricing on every charge between the two companies from the first invoice onwards.
What tax filings does a Canadian subsidiary of an Indian parent have?
The subsidiary is an ordinary Canadian taxpayer. It files Canadian corporate returns on its own income, registers for the relevant sales taxes once it begins supplying, and operates payroll withholding for anyone it employs. On top of that sit the cross-border items: reporting of its transactions with the Indian parent, and withholding on amounts it pays out of Canada. The parent carries its own Indian reporting on the investment. None of this waits for profit. A company that has spent money and earned nothing still has a filing calendar, and the penalties attached to the information returns are not measured by the tax that would have been due.
Do I have to report the Canadian subsidiary in India every year?
Yes. The Indian outbound-investment reporting is annual and continues for as long as the investment is held, not just in the year the money left India. It draws on the Canadian company's own financial statements, so the two sets of books have to be reconcilable — the figure reported in India should be traceable to the Canadian accounts that support the Canadian return. Groups commonly deal with the Canadian side properly and treat the Indian annual filing as an afterthought, which is how a gap opens up between what each authority has been told about the same subsidiary.
Should we fund the Canadian company with share capital or a loan?
The choice decides what repatriation looks like later, so it is worth settling before the money moves. Equity comes back as dividends; debt comes back as interest and repayment of principal, and the treaty does not treat those the same way. Debt also brings its own constraints: the deductible interest is limited by reference to the company's capital structure, and the rate has to stand up as one an independent lender would have charged. Unwinding the decision afterwards is harder than making it, because the funding already sits in the accounts both authorities will read.
How do we charge our Canadian subsidiary for head office support from India?
Start from what the Canadian company actually receives and would otherwise have had to buy or do itself. Identify the costs in India that relate to it, choose an allocation basis that reflects how the support is consumed, and write the arrangement down before the invoices start rather than after. Then deal with the payment side: a service fee paid out of Canada has its own withholding treatment, which depends on how the fee is characterised and on what the treaty says. Both authorities will read the same agreement, so it needs to describe work that demonstrably happened.
What is withheld when the Canadian company sends money back to India?
It depends entirely on what the payment is. Dividends, interest and service fees are characterised separately and the treaty deals with each on its own terms, so the label on the payment instruction matters less than what the underlying arrangement really is. Withholding applies to the gross amount paid, not to a margin, and the Canadian payer is the one held responsible for getting it right and remitting it. Entitlement to a treaty rate also has to be supported — the recipient's residence and status are things the payer is expected to have established before the payment goes out, not afterwards.
What are Forms 15CA and 15CB for?
They clear a payment out of India. Form 15CA is the remitter's declaration of the payment and the tax withheld on it; Form 15CB is an accountant's certificate on the taxability of the amount, the treaty article relied on and the correct withholding rate. The bank generally will not execute the transfer without them, in the categories where they are required. The work is deciding the rate correctly, because the certificate is the record of that decision. See 15CA and 15CB certification.
What is RNOR status?
Resident but not ordinarily resident — a transitional category in India between non-residence and full residence, reached on the day counts after returning from a period abroad. While it lasts, certain foreign income stays outside the Indian tax base, which makes the timing of a return to India worth planning rather than leaving to chance. It is temporary, and the window is set by the day-count rules. See RNOR status.
