Question 1

What is OECD Pillar Two and does it affect Indian groups?

Accepted Answer

Pillar Two introduces a 15% global minimum tax on large multinational groups with consolidated revenue above €750 million, through the GloBE rules (IIR and UTPR) and a domestic top-up tax. Indian-headquartered and India-present groups within that threshold must model their effective tax rate jurisdiction-by-jurisdiction and prepare GloBE Information Returns.

Question 2

When is transfer pricing documentation required in India?

Accepted Answer

A taxpayer with international transactions or specified domestic transactions exceeding the prescribed thresholds must maintain TP documentation and file Form 3CEB by the due date. Master File (Form 3CEAA) and CbCR (Form 3CEAD) obligations apply to larger multinational groups based on revenue thresholds.

Question 3

What is the difference between MAP and APA?

Accepted Answer

An Advance Pricing Agreement (APA) is a forward-looking agreement with the CBDT fixing the arm's-length price for future years (and optionally rolling back four years). The Mutual Agreement Procedure (MAP) is a treaty mechanism to resolve double taxation that has already arisen, between the two countries' competent authorities.

Question 4

When do I need a Form 15CB before a foreign remittance?

Accepted Answer

Form 15CB is a CA certificate on the taxability and withholding on a foreign remittance, generally required before submitting Form 15CA Part C for taxable remittances above ₹5 lakh in a year. Certain specified payments are exempt. We determine the correct rate after applying the relevant treaty.

Question 5

How does a tax treaty (DTAA) reduce my tax?

Accepted Answer

A DTAA allocates taxing rights between two countries and usually caps withholding rates on dividends, interest, royalties and fees for technical services below domestic rates. To claim treaty benefits a non-resident needs a Tax Residency Certificate and Form 10F, and must satisfy any limitation-of-benefits and beneficial-ownership conditions.

Question 6

What triggers a Permanent Establishment (PE) in India?

Accepted Answer

A PE can arise from a fixed place of business, a dependent agent habitually concluding contracts, a service PE from prolonged personnel presence, or a Significant Economic Presence for digital businesses. A PE exposes the foreign enterprise to Indian tax on attributable profits — we advise on structuring to manage PE risk.

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