Management consultants: your filing calendar — reasonably priced, fixed fee

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.

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.

We start from your actual assignment pattern rather than a generic calendar — when each engagement started and ended, which countries were involved, and whether an extension is needed in either jurisdiction while we wait on documents from a client or another return. Because one country's return sometimes depends on a figure from the other, we sequence the two filings so neither one is finished on an estimate the other return later contradicts.

A mismatch in tax year timing between the two countries means income earned in a single engagement can fall into different reporting periods depending on which country's return you are preparing. We reconcile which period each payment belongs to under each country's own rules, rather than assuming the two calendars line up, so the same consulting fee is not left out of both returns or reported twice.

Not necessarily a separate deadline each time, but the presence and income from every short assignment still has to be tracked and rolled into the applicable return, and enough short assignments in one country can shift your status there over the year. We keep a running record of each assignment as it happens rather than reconstructing the year at filing time, which is where consultants with several short engagements tend to lose track.

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.

Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.