Tax Treatment in International Taxation

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CA Nikhil Jhanwar (Querist)
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14 July 2011 Indian Company is having a 100% foreign subsidiary. The profits earned by that foreign subsidiary will be taxable in foreign country and also in India. What will be the tax treatment? Who will pay the tax and how? Whether Indian Company will pay it?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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15 July 2011 The subsidiary being a separate legal entity
will have to pay the taxes.

Holding company is just like a shareholder in the company.

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CA Nikhil Jhanwar

CA Nikhil Jhanwar (Querist)
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15 July 2011 Thanks.... Sir......

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CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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15 July 2011 Moreover the dividends if any declared by the foreign subsidiary shall be taxable @15.45%(special scheme applicable for this year only).

Also the Indian company can claim credit of taxes paid in foreign country(depending on the country)on such dividends.

Also the Indian company is also required to file Statement of Assets & Liabilities in respect of such investment outside India.

Anuj
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CA Nikhil Jhanwar

CA Nikhil Jhanwar (Querist)
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16 July 2011 Thanks a lot Anuj Sir for your information