Salary from Foreign Comapny

[Pradeep Kaushik]

Respected Sir,

 

Our process to establish Manufacturing Division in India,is under process.

For this purpose we have selected one Indian Person for Planning & Development in India.

His Salary will be paid by Main Company in Korea. i.e. Salary will be remitted from Korea in Employee's Bank Account.

 

Please sugesst us:

 

1. Any Transfer Pricing Issue regrarding these transactions.

2. Any Tax Obligation (Direct- Indirect)

 

Best Regards.

Pradeep kaushik

 

[Anuj Gupta]

Hi Mr. Pradeep,

 

Can you confirm that whether you have opened a Branch office or a subsidiary in India. I am asking this because you can manufacture in India only as a Branch or subsidiary of a foreign co.

 

If the answer to my query is yes then the salary to Indian should be paid from the Branch or Indian Subsidiary and then the TDS shall be needed to be deducted by the Branch or Indian Subsidiary, as the case , amy be.

 

Even if the Indian person is paid salary directly from Korea then TDS on his salary has to be deducted and deposited by Korean Company.

 

Anuj

[email protected]

+91-9810106211

[Pradeep Kaushik]

Dear Anuj Ji,

 

As initial stage, there is no Branch office or a subsidiary in India. This is in process and will be in near future.

But till then, this Indian Employee's salary will be Remitted through Korea.

Second Option: That Korean company, already has an another business in India. Is it Possible that  this Indian Subsidiary Company make the Salary on Behalf of the Korean Company and get it Reimbursed from Korea.

Please Advise.

Best Regards.

Pradeep Kaushik

[Anuj Gupta]

Yes, salary can be paid but adequate care need to be taken for the Transfer pricing issue arising rom the same.

 

Anuj

[email protected]

AI Summary

Tax withholding obligations for cross border payroll require TDS compliance and transfer pricing care for reimbursements. A foreign parent's payment of salary to an Indian national engaged to establish manufacturing operations in India raises Indian tax withholding obligations. If a local branch or subsidiary pays, that Indian entity must withhold and remit tax. If the foreign company pays directly, the foreign payer must ensure TDS compliance for salary for services in India. Payment by an Indian subsidiary and reimbursement by the foreign parent is possible but requires arm's length transfer pricing documentation and careful structuring.