Foreign company with an Indian subsidiary — filings: how much of this can I do myself?
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: the annual set includes the corporate return, the accountant's transfer-pricing report, the tax audit report where thresholds are met, and exchange-control reporting on the foreign investment.
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 subsidiary need a transfer pricing report every year?
If it has any international transaction with a related party, yes. The accountant's transfer-pricing report is mandatory on international related-party transactions regardless of size, which surprises groups whose Indian dealings amount to a modest management charge or a single intercompany recharge. There is no small-transaction relief to fall back on, and the obligation is annual rather than triggered by a change. The practical work is identifying every transaction that qualifies, which is often more than the ledger's intercompany account shows. We start from the group's own arrangements rather than from what has been coded as intercompany.
What does an Indian subsidiary have to file each year?
The annual set is wider than the corporate return alone. It includes that return, the accountant's transfer-pricing report where there are international related-party transactions, the tax audit report where the thresholds for it are met, and reporting on the foreign investment under exchange-control law. These are not independent filings. They are read together, and an inconsistency between them is visible without anybody having to ask a question. We prepare them as one set from one set of figures, and reconcile them against each other before any of them is submitted.
Are small related party transactions exempt from documentation in India?
No. Size does not take an international related-party transaction outside the requirement, so a single recharge in a year brings the same reporting obligation as a substantial flow. Groups frequently assume the opposite, because in other jurisdictions they are used to thresholds and simplification measures. The useful question is not whether a transaction is big enough to matter but whether it is an international transaction with a related party at all, and that catches guarantees, shared costs and services provided without invoice. We map the arrangements first, then deal with what the mapping produces.
Does my Indian subsidiary need a tax audit report?
That one does turn on thresholds, unlike the transfer-pricing report. Whether the subsidiary is within them has to be tested against its own figures for the year rather than assumed from last year's answer, and the test needs to be done early, because the report has to be prepared and the underlying records have to support it. A subsidiary that crosses the line for the first time usually finds its bookkeeping was not kept with that in mind. We test the position during the year, not after the accounts are closed.
What exchange control reporting applies to our investment in India?
Putting money into an Indian subsidiary engages exchange-control law as well as tax law, and the reporting on the foreign investment is a separate obligation with its own timing. It is the part groups most often overlook, because the tax adviser is looking at the return and the corporate secretarial team is looking at the company filings. The reporting also has to agree with what the subsidiary's own records and accounts show about the shares issued and the funds received. We treat it as part of the annual set rather than as a one-off at the time of investment.
Why do our Indian filings all have to agree with each other?
Because they are read together. The corporate return, the transfer-pricing report, the tax audit report and the exchange-control reporting describe the same year from different angles, so a related-party flow disclosed in one and absent from another, or funds recorded differently in two of them, is an inconsistency visible on the face of the documents. Explaining it afterwards is harder than avoiding it. We reconcile the set before submission and keep a working paper showing how each figure in one report ties to the corresponding figure in the others.
What is a permanent establishment?
The threshold at which a country may tax a foreign company's business profits. It is met by a fixed place of business — an office, a branch, a workshop — and also by a dependent agent habitually concluding contracts on your behalf, with separate rules for construction sites and, in some treaties, for services performed over a period. Cross it unnoticed and you owe returns and tax in a country you never registered in. See permanent establishment risk.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
