What makes management consultants different from an ordinary filing?
Consultants furnishing services in a country for an extended period can create a service permanent establishment for their firm, and several treaties — India's among them — apply that test at a low threshold. An ordinary preparer applies the general rule and stops there, which is how the relief in the specific provision goes unclaimed.
Can you work with my existing accountant?
That is how most of these engagements run. They keep the domestic file, we take the cross-border piece, and the boundary is agreed in writing so nothing is done twice or missed.
How is a consultant's income divided between two tax systems?
The starting point is where the work was physically performed and who paid you, since those two facts usually decide which country has first claim on a given portion of income. From there, your home country generally taxes your worldwide income but allows a credit for what was already paid abroad, so the split is less about dividing an amount and more about which country taxes first and which one gives credit for that.
Which country generally has first claim to tax my consulting income?
The country where the work was performed, or where the client paying you is based, usually has the first claim, and your home country then taxes the same income again but offers relief so it is not taxed twice. Which country actually collects the larger share depends on each country's rate structure and how the credit or treaty article is applied, which is why we run the calculation both ways before filing rather than assuming the home country return is simply a formality.
Can the same consulting income get taxed in both countries?
It can, if the foreign tax credit or treaty relief is not claimed correctly on the home return — both countries are entitled to assess the income, and the mechanism that prevents double taxation only works if it is actually applied on the return. We reconcile what was reported and paid abroad against what your home country return shows, so the credit matches the foreign tax actually paid rather than an estimate.
Do American citizens living abroad have to pay taxes?
American expats and green card holders need to file US returns for life, and many of them pay little or no US tax once the relief is applied — but the filing is what unlocks the relief, so the two questions have different answers. The exclusion for foreign earned income, the credit for foreign tax already paid and the treaty between the two countries between them usually leave the total at roughly the higher of the two countries' tax rather than the sum. Skip the return and none of it applies. See Americans abroad.
What is a permanent establishment, and how easily do we create one?
A taxable presence in another country under the treaty — typically a fixed place of business such as an office, branch, factory or workshop, or a dependent agent habitually concluding contracts on your behalf. Some treaties add a services test measured in days. Purely preparatory or auxiliary activity is excluded, but that carve-out is narrower than it sounds: one senior employee working from home in the other country, with authority, has been enough. See business profits and permanent establishment.
