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Transfer Pricing Services And Consultancy: Top Reasons Why You Should Choose SBC

Transfer Pricing Services And Consultancy: Top Reasons Why You Should Choose SBC

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MNEs are operating in an environment of unprecedented complexity. The rising volume and variety of intercompany transactions in the midst of a continually evolving Transfer Pricing regulatory landscape, accompanied by increased enforcement activities worldwide, have made Transfer Pricing a leading risk management issue for global businesses.

Transfer pricing is a useful strategy for allocating earnings internationally throughout the value chain, ensuring that each tax jurisdiction is compensated with a fair and equitable tax distribution. When your prices are properly planned out and established, it is simple to win the tax authority’s trust by outlining how prices were developed and how the entire price-setting process was approached.

SBC with its rich experience and demonstrated capabilities, believe in providing holistic Transfer Pricing solutions to clients tailored to meet business objectives and at the same time be robust, scalable, and sustainable from a BEPS & local Transfer Pricing Regulations standpoint. This blog highlights why you should choose the expertise of Steadfast Business Consulting for your transfer pricing requirements!

Why should you choose SBC for Transfer Pricing Services?

Our Team:

Our team can provide a certain level of security for taxpayers in the event of audits, disputes, or double taxation because our experts are familiar with the risks and requirements specific to different industries. In addition, knowing that your transfer pricing reports are in compliance with industry standards gives you peace of mind.

With a robust and professional team of CAs, Corporate Consultants, Financial Consultants, and Tax Consultants, Steadfast Business Consulting is one of the best Transfer Pricing consultation companies for MNEs.

Robust Database

The firm is decked with international benchmarking databases to handle the global benchmarking work of companies spread across different jurisdictions.

Comprehensive Transfer Pricing Solutions

SBC provides comprehensive Transfer Pricing solutions encompassing – Transfer Pricing planning for new related party transactions and Transfer Pricing documentation (as statutorily prescribed by local jurisdictions). We provide end-to-end litigation support across judicial forums on all Transfer Pricing Services. We also assist MNEs to strategize and evaluate alternative dispute resolution routes – Advance Pricing Agreements, Mutual Agreement Procedure, and Safe Harbour Rules.

Transfer Pricing Compliances:

  • Transfer Pricing Documentation
  • Accountant’s Report – Form No. 3CEB
  • Master File
  • Country-by-Country Report
  • Global Transfer Pricing Compliance – Regional/Country comparable studies & filings adhering to OECD guidelines and local regulations.
  • Transfer Pricing Comfort Letters/Memos for Statutory Auditors
  • FIN 48 Assistance – Quantification & Opinion on Transfer Pricing exposure and uncertain tax positions
  • Transfer Pricing analysis and Board meeting presentations for Listed Companies from SEBI Regulations and Companies Act perspective.
  • In addition, SBC has access to all major Indian and Global databases/software – Prowess, CapitalineTP, AceTP, Amadeus, Compustat, Kt-Mine, RoyaltyRange, RoyaltyStat, Orbis, Osiris, IBISWorld, Factiva, One Source, Loan Connector etc.
Transfer Pricing Advisory:
  • Transfer Pricing Policy & Price Setting
  • Drafting/Review of Inter-Company Agreements
  • Alternative Business and Remuneration Models that are sustainable
  • Comparable Studies and Benchmarking analyses
  • Operational Transfer Pricing
  • Group Profit & Effective Tax Planning
  • Tax efficient structuring of international transactions & transaction flows
  • Supplementary analyses to strengthen the documentation from litigation perspective
  • Voluntary Transfer Pricing Adjustments
Secondary Adjustments
  • Transfer Pricing Health Check-Up to avoid/mitigate risks
  • Drawing Segmental P&L for Transfer Pricing Purposes
  • Economic adjustments computation – Risk, Working Capital, Forex, Capacity Utilisation, Depreciation, Cash PLI adjustments
Planning, Implementation & Compliance support for:
  • Intangibles – Structuring, Royalty & Licensing rates, Withholding implications, Agreements
  • Financial Transactions – Interest rates, Withholding implications, Agreements
  • Intra-Group Services, Management Charges, Cost Contribution Arrangements – Charging/mark-up rates, Agreements, Cost pooling & allocation
  • Business Restructurings – Transfer Pricing implications, Agreements & Contracts review
  • General Anti Avoidance Rules (GAAR) implications
  • Permanent Establishment (PE) Exposure for existing/proposed transactions
Transfer Pricing Litigation support & Representations before:
  • First level authorities – Transfer Pricing Officers (TPO)/ Assessing Officers (AO)
  • Dispute Resolution Panel (DRP)
  • Appellate authorities – Commissioner of Income Tax (Appeals) [CIT(A)], Income Tax Appellate Tribunals (ITAT), High Court, Supreme Court
  • Penalty, Rectification, Re-assessment, Revision, Remand, Order giving effect, Stay of demand proceedings
Alternate Dispute Resolution Routes – Advance Pricing Agreement (APA), Mutual Agreement Procedure (MAP), Safe Harbour Rules (SHR):
  • Cost-Benefit Analysis for decision making
  • Filing of Applications in prescribed Forms
  • Representations & Submissions
  • Application Renewals
  • APAs – both unilateral & bilateral
BEPS advisory – Readiness, Implementation, Impact on International Tax Structures
  • BEPS Contract Analysis
  • Value Chain Analysis and Management
  • OECD Pillar 1 & 2 – Readiness, Implementation & Impact
  • Supply Chain Restructuring
  • Three Tier Documentation support in line with Action 13
  • IP Structuring /DEMPE analysis in view of Action 8
  • Financial Transactions planning factoring in Action 4 and 9 and OECD guidelines on Financial Transactions
  • High-risk transactions structuring in coherence with Action 10
  • Profit Split Method – applicability, implementation, splitting factors, projections, segmentation, planning/price-setting as per BEPS
Valuations for arm’s length determination for Transfer Pricing purposes:

Assets (tangibles & intangibles) transfer between relation parties:

  • Capital/financial transactions (equity, debt & hybrid instruments, guarantees) – issue, sale, buybacks between related parties
  • Mergers & Acquisitions transactions – selling, buying, combining, restructuring involving related parties

Conclusion

Our expertise in international transfer pricing, transaction structure, and transfer pricing compliances spans many years. We are able to illustrate and explain the ideal fusion of an international viewpoint and insights with the Indian transfer pricing laws and the actual methodology used by the Indian transfer pricing authorities.

Feel free to contact our specialists if you have any questions regarding representing your case before the transfer pricing authorities or if you would want to talk about your transfer pricing audit services to prevent litigation.

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Why Are Mergers & Acquisitions Service Crucial For Enterprises

Why Are Mergers & Acquisitions Service Crucial For Enterprises

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The global mergers and acquisitions (M&A) activity fluctuated significantly over the past two decades in terms of the value of global M&A deals and the number of deals completed.

Mergers, acquisitions, internal reconstructions/reorganizations, hive-off, etc. are being taken up by companies which are seeking growth, efficiencies, synergies, business focus, wealth maximation in both domestic and international markets.

Why are M&A services crucial for businesses?

Successful businesses often think about acquiring another company or merging with a competitor in the same sector. Increasing profits by extending your market and lowering competition is the common driving force behind businesses engaging in mergers and acquisitions. Corporations may also merge in order to buy distinctive assets, break into undeveloped markets, or develop a synergy that increases the worth of the two or more merging businesses. M&A offer advantages and disadvantages that are unique from other corporate deals. Here are some more reasons for which organizations shall consider undertaking M&A:

Economies of Scale

One of the important end goals of an M&A activity is to achieve economic gains and economies of scale. This becomes feasible/ possible as the firms involved in the deal are stronger together than apart. The consolidated businesses reap benefits like:

  • Improved access to capital
  • Better bargaining power in the marketplace
  • Service to a wider customer base across geographical locations
  • Lower costs resulting from high volume production and more.

Competitive Approach in the Marketplace

Synergies are usually defined as ‘4+4= 10,’ i.e., the profit from two companies working together makes something more powerful than their performances. M & A services offer Corporate Finance Consulting, which helps organizations understand their potential financial strength if the M&A activity sails through. Having greater financial strength can lead to a higher marketplace segment, more customer control, and decreased competitive threats.

Talent acquisition

Indeed, every firm needs talented employees, and when it comes to talent acquisition, it is one of the major concerns for corporations that wish to stand out in the market. The bigger the business, the better access to the best available talent. This trend is distinct across industries, from manufacturing to technology and services. Therefore, one of the key considerations at the time of undertaking a restructuring activity is the retention of the old workforce and integrating them into the new structure, which helps the organization obtain a skilled and talented workforce.

Access to Resources adds Diversification through Portfolio

Businesses in a similar sphere can sometimes enhance procurement access to raw materials, suppliers, and tangible & intangible resources.

Expanding services into a new market can be difficult, even for well-established businesses. While setting up a branch is always a choice, it saves significant time, effort, and money compared to starting from scratch.

This is particularly right for businesses ready to move into an overseas market. Therefore, it is more practical for most companies to unite with an established local business having its legacy business and domain expertise with a dedicated customer base.

Enterprise Continuation

Often small businesses are privately owned. Once the founder step downs, business failure is possible because there may not be a strong succession strategy. This can put the organization out of work and affect the stakeholders of the business. M & A strategies help ensure business stability and succession, decrease operation interruptions, protect the stakeholders’ interests, and offer job security for employees.

Why SBC?

A sizable portion of M&A activities fall short of expectations in terms of advantages. In order to provide the desired results, integration of any mergers, acquisitions, internal reconstructions/reorganizations, hive-off, etc., should be carefully planned and carried out. After the sale closes, the hard work begins.

Reduced Risk: we provide end-to-end assistance in dealing with restructuring activities which namely involve pre-acquisition due diligence, ideating & conceptualizing restructuring activities, implementation assistance and post-closure compliances/ assistance.

Experience dealing with Indian businesses: Since more than 90% of Indian businesses are family-owned, we are aware of the value of building a long-term relationship with them and serving as their confidant.

Experience: We have decades of expertise in assisting various business groups (domestic and international) in undertaking numerous transactions/ restructuring activities from both the target/ vendor perspective as well as from the buyer perspective.

Our Services

Our professionals have a wide range of expertise in establishing integration governance, putting in place the structures necessary for effective integration, and collaborating closely with your teams to precisely define every aspect of the goal and carry out the plan smoothly. We provide M&A services to clients throughout the transaction’s lifecycle; from acquiring a company to structuring the transaction, from tax advisory to due diligence, from kick-starting the transaction to getting approvals from regulatory bodies and operate seamlessly across various functions within SBC to offer a complete suite of M&A solutions to our clients.

We will simultaneously ensure that you get the anticipated advantages and maximize the value of your M&A deal.

CORPORATE RESTRUCTURING
  • We assist in identifying alternate corporate restructuring options that may be available after M&A, critically evaluate the same from each stakeholder’s perspective and identify potential tax costs associated with it, suggest suitable options for cash and tax rationalization, evaluate regulatory hurdles if any, and help appropriate decision making.
FINANCIAL STRUCTURING
  • Extensive analysis of each transaction, enabling conceptualization, selection, and implementation of options from a tax and regulatory perspective, is provided during the process of undertaking M&A. In addition, advice on profit extraction/ cash repatriation techniques is also provided from a tax and regulatory efficient manner.
ACQUISITION STRUCTURING
  • Advice on domestic and inbound/ outbound acquisition structuring for strategic acquirers – directly or through appropriate intermediary jurisdictions, tax treaty network of intermediary jurisdiction, taxation on current acquisition & future divestment or exit, and capital market implications. In addition, we assist in structuring acquisitions, either by way of asset/ business purchase or share purchase, from a tax and regulatory perspective.
TRANSACTION ASSISTANCE
  • We provide in-depth advice on the transaction structure from an overall tax & cost optimization perspective in case of an acquisition of an existing business (share deal Vs Asset deal), undertake drafting/ reviewing contracts with local joint venture partners, provide due diligence support, assist in setting up of entities for international groups. Further, we also help foreign companies fine-tune their investment strategies while making inbound investments.
POST DEAL SUPPORT
  • We extend post-deal support such as drafting necessary documentation, management of condition precedents, necessary Regulatory approvals, project management of closure activities, compliance with FEMA, Companies Act and other applicable regulations, liaising with regulators and filing of necessary forms/ letters/ intimations. We even assist in post-deal integration activities such as identifying the various licenses and registrations, government sanctions, awards, etc., that need to be altered, or taken afresh, review customer contracts, vendor contracts and other business contracts. Further, a structured approach is provided by working with the key stakeholders in the client’s team. Substantial time is spent on the planning, sequencing, and timing of every action to ensure there is no business disruption. Subsequently, our experienced team manages and implements the said framework.

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How Tax Consulting Services Are Helpful To Your Business?

How Tax Consulting Services Are Helpful To Your Business?

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Snippet:  Tax consultants are professionals who offer business-centered tax advice and implementation services to clients who function in different sectors. Their services add to an efficient tax experience.

No business can survive in isolation without complying with the laws of the land.

There are too many things that a business owner needs to consider to witness a positive graph. You have to manage the stress of finances, sales, clients, staff, and much more. But the most daunting and important thing is to deal with the taxes. It is a critical task that requires sound knowledge and is often time-consuming.

Hiring for corporate tax services can lower your burden related to tax management. A professional tax consulting company analyses financial and tax problems, formulates solutions, and makes recommendations designed to provide advice on taxation for clients ranging from individuals to businesses.

Need for Tax Consulting

  • Well, honestly, the need to file taxes depends majorly on your business requirements. In the present scenario, every penny saved by you is reinvested in your business. Hence, the precise suggestions on your finances and income statement will present the growth of your business capital.
  • Speaking about the taxes concerned, you can save taxes with a good awareness of tax credits and deductions.
  • When you focus on the growth of your business, you need to invest all your time, energy, and effort into its expansion, which becomes difficult at times to manage and make a proper decision that would be beneficial. The tax consultants will have a fair idea and take reasonable judgment because they would quickly know all the pros and cons of taking a particular decision at a specific time due to their professional and technical expertise.
  • At the inception of a business, if the planning is done with the help of tax consultants, they provide better planning advice for the business in a cost-effective manner.

Benefits of Choosing Tax Consulting Services:

A failure to file your taxes correctly may, out the penalties and fines due to the business, which may cause damage to the reputation of the entity, may lead to dissatisfaction of stakeholders and government intervention in the business. Hence it is important to hire the best tax consulting services to manage all the strain and save your business from a poor reputation.

1.More time to develop new business strategies

A business-centered person who has chosen a tax consultancy service will get more free time, mind, and energy to focus on generating higher profits, exploring new opportunities, and thereby enhancing their business. The problem of managing taxes which negatively impacts the entity if ignored can be taken care of by these professionals.

2.Holdover the changing tax regulations

The taxation system is dynamic, and it may be tough to know everything about the complex taxation system. A lot of complex guidelines need to be taken care of. It becomes more complex where new rules/amendments are added or tweaked within the guidelines to comply with them. The professional tax consulting firms are well aware of these changes and complexities. The professionals keep themselves updated about the new Indian taxation guidelines and cater to the changing tax structure.

3.Accuracy is a major help

Businesses involve all types of multidimensional assignments and tasks. There are several accounts, hundreds of transactions, and statements to take care of with a wide range of incomes and expenditures that should be dealt with while managing the tax liabilities/refunds.

For a normal persona, it may be tough to keep track of transactions of such levels with precision. This is where the services of a tax consultancy come into action. They offer the probable highest level of Accuracy by managing all the parameters.

4.Help in audit

The taxpayers are audited yearly by the tax regulatory bodies, and your business may become a part of the audit. Tax consultants in India consider these unexpected conditions while preparing tax returns and draft ITR filing with more careful attention by ensuring compliance with relevant laws and regulations applicable to your entity.

Sometimes auditing may become unavoidable; under such circumstances, they ensure that your presentation is done efficiently in front of the authorities.

5.Professional services

Hiring tax consulting and planning services comes with the additional benefit of getting a professional vision for every task. Working with different niches and business scales, the tax consultants acquire a better perspective on the subject. A tax consultant can handle complicated issues by lowering the financial risks and uncertainties and even helps you check any prospective problem that may arise during the business in the near future. They also offer unbiased and practical suggestions if any business issue is diagnosed.

6.Problem-free tax filing

Professional tax consulting companies offer expert tax preparation services to help you experience hassle-free tax filing as they deal with all the tax problems on your behalf. A tax consultant will manage your deductions, which will lower your tax liabilities.

7.Tax deductions

Tax professionals have updated knowledge of recent tax reforms and tax amendments. A professional tax consultant looks for the possibility of deductions and credits for taxpayers to mitigate the tax liability while filing your ITR. Hence, an expert tax advisor can save your time and money.

8.Organized document handling

Compared to individual tax filing, paperwork and documents legalities are more in a business tax filing. And every paper and document is important when you are handling tax calculations. A professional tax consultant thoroughly organizes and manages every needed document, decreasing your hassle. You do not need an additional person to manage your documents.

9.Lower computation mistakes

Even a minute error in the calculation of taxes can lead to devastating consequences. Tax consulting services are trained and experienced in handling numbers and transactions. Several tax professionals consider tax calculating software to double-check their work which diminishes the chances of errors.

Grow your business with professional tax consulting

In short, seeking help for business tax and consulting services is the best decision for your business. The facilities offered by tax consulting services are helpful for your business in the short and long term. They manage every parameter linked to your business taxes with great precision and excellence, lessening the burden so that you can easily focus on your core business.

These are the benefits that you can derive from tax consultants in India. If you are looking for tax consultants, your search is over. Steadfast Business Consulting is a tax consultancy firm that serves as the best tax advisor in India and globally. The firm has highly skilled and experienced tax consultants in diversified fields and industries who can help you efficiently deal with your business taxes.

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Why Hire SBC For GST Services?

Why Hire SBC For GST Services?

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The Indian tax regime follows a methodology wherein different tax law provisions are applicable to a single transaction which tends to create contentious lawful problems. Currently, the Income-Tax Act 1961 and the GST Laws (CGST Act, 2017) are the major regulations working together in the direct and indirect tax front respectively.

Specific provisions in Income tax and GST, present a variety of chances and problems for any business.

Hence, it is crucial that the businesses gear up and be prepared to avoid any potential litigations.

Sometimes it might be difficult for any organisation to keep up with the timelines under both direct and indirect taxes. The burden to keep up with all the compliances, timelines, notices might become cumbersome. Thus, the need for a reliable and reputable professional service handling all tax related matters arise.

This is where Steadfast Business Consulting enters!

Developed on the five major pillars of Trust, Client Relationship and satisfaction, cost effectiveness, Time efficiency, and Quality, SBC is a multi-dimensional professional Corporate Tax Planning firm offering a broad range of taxation and regulatory services to its clients across the globe.

As a leading indirect tax consultant, we offer complete range of services in relation to indirect taxation, of high quality within budgetary limits. Here is why SBC is your ideal partner.

1. Team of Steadfast

The Company has a founding team of professional people who are its known consulting partners. Every partner has diverse and niche expertise in different fields such as Transfer Pricing, Indirect Taxes, Mergers and Acquisitions, Outsourcing Business, Domestic and International Taxes, Internal Audit, Government Incentives and more. The team’s diverse expertise makes Steadfast one of the best solutions providers, helping businesses meet their operational and financial goals.

2.Easing Tax Compliance through Technology

Steadfast Business Consulting focuses on Automation, Tracking and offers consistent updates, dashboard systems, MIS and Tax network connections, and access to databases that help acquire clients’ confidence. We at SBC have an organized GST automation product in collaboration with our IT partner to automate the GST E-Invoicing system to help clients to automate reconciliations and other manual tasks involved in GST. Along with this, a cloud-based database storage system provides real-time access to data for both clients as well as SBC staff.

3. Services Offered by SBC:

The majority of the previous indirect taxes collected by the Center and the States have been subsumed by the transaction tax known as GST. Given the size of the shift, there are particular difficulties and complications in its implementation. Businesses have reviewed their tax structures and restructured them to conform to the GST requirements.

We are in an optimum position to assure compliance with the GST law and in providing value-driven services to our clients, thanks to our subject matter expertise in indirect taxation and experience managing GST transition for diverse enterprises.

a. Compliances:

The GST has altered how business is conducted. Every firm must evaluate how the GST would affect different areas of their operations. Doing things not just right but also at the right time is very essential in adhering to tax compliances. Our gamut of services under GST compliances include:

  • Computation of tax payments and filing of various returns
  • Assist in reconciliation of input tax credits as per the GST system and as appearing in records maintained by the Company
  • Preparation of compliance tracker
  • Assist in queries related to e-Way bills generation
  • Assistance in undertaking GST Annual compliances

b. GST Refund:

Presenting choices for requesting refunds or rebates, aiding with the creation and submission of required paperwork, and following up with the agency to secure the benefits is also our core competency.

With the objective that the taxes are not exported or embedded in the supply chain, the refund of GST paid on eligible purchases is extended as a refund to exporters and businesses covered under an inverted duty structure (i.e., instances where the rate of tax paid on input is higher than the rate of tax payable on outward supplies made).

We undertake cost-benefit analysis and suggest the best workable options in client-specific facts, including the following:

  • Evaluating the alternatives of refund/rebates and advising on the beneficial method for claim
  • Designing system for generation of the necessary documentation for preparing refund claim
  • Assistance in the retrieval of supporting documents
  • Preparing refund claim as per statutory requirement
  • Filing refund claim with department and making follow up
  • Making representation in case refund claim rejected

c. GST Litigation:

GST still being in nascent stages and evolving both from a policy and implementation perspective; there are several uncertainties in the interpretation of the provisions. With the possibility of multiple interpretations being taken, several issues result in increased litigation. We assist our clients in:

  • Preparing replies to various intimations, notices received under the GST Act and drafting of appeals, etc.
  • Drafting and filing applications seeking advance rulings
  • Representation services
  • Litigation review exercise to formulate a strategy for swift resolution of matters

d. GST Health Check-up Services/ Reviews:

We undertake to review the overall tax positions and compliances undertaken by the Company, thereafter, suitably advising for any tax efficiencies. The review is intended to unearth any possible gaps in the tax system or position adopted. With our experience, we know the possible areas where there can be a lapse in the tax system implemented. As a part of the review, we shall:

  • Review the position of the Company as to whether the same is in consonance with the existing GST Compliances
  • Identify risks and opportunities, viz. areas of non-compliance and potential tax exposures, areas of savings, etc., and provide suggestions on the same
  • Review of various processes followed by the Company from a GST perspective

e. Foreign Trade Policy:

The Foreign Trade Policy has been issued by the Ministry of Commerce to promote and facilitate exports of goods out of India and also to govern imports into the country. Amongst others, the Policy provides for benefits like setting up the unit as an STP/EOU, remission of Duties and Taxes on Exported Products (RoDTEP), and Rebate of State & Central Taxes and Levies Scheme (RoSCTL), Service Exports from India Scheme (SEIS), etc. We at SBC have consistently assisted our clients in optimising the claim of different incentives extended under the FTP.

f. Special Economic Zone:

  • Assistance in filing applications, liaising with authorities in obtaining SEZ approval as a Co-developer, Unit.
  • SEZ Compliances including filing performance reports, SOFTEX forms, DTA Services Procurement Form (DSPF)

Conclusion

We are well familiar with the government’s operations and policies. As a result, our highly efficient team can effectively use the information and resources to reduce your tax burden while abiding by the law. Make sure to contact our Goods and Services Tax planning specialists as soon as possible if you don’t want to incur any more taxes or unwarranted fines.

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An Overview: Corporate Taxation In India

An Overview: Corporate Taxation In India

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Snippet: Know about corporate tax in India and how the profits earned by companies are calculated to compute corporate taxes. Find out corporate tax rates and details on rebates and deductions.

In India, taxes on revenue, money, and capital gains are rich sources of taxes for the Indian government. Whether domestic or foreign, corporate houses should pay taxes to run their business in India. A major tax that corporates pay to the Indian Government is corporate tax.

The corporate taxation rate in the country remained the same at 25.17% in 2022 from last year. However, according to Statista, the corporate tax rate in India may reach 30% by 2025.

What is Corporate Tax?

Corporate tax is a type of direct tax charged on the revenue earned by a business house during a specific yearly tenure. Corporate taxes are charged on a company’s income after deductions like depreciation, cost of goods sold, selling, and general and administrative expenditure have been considered. These deductions may be subject to certain conditions and if they don’t satisfy the same, the deduction may not be allowed or deferred. This leads to deferred tax calculations and difference in tax profits when compared to book profits.

The corporate tax can also be called income tax for revenue generated by businesses. Several countries charge corporate taxes for a better tax process. There are different rules for applying corporate tax in different countries.

Corporate tax in India

Corporate tax in India is charged basis the domicile of the corporates Just like individuals earn income and pay tax on it, business houses should also pay tax as part of the income generated.

For effective tax calculation, companies in India are divided into two categories:

Domestic Corporates: Any company which is formed as per Indian law is known as domestic corporate. Additionally, even if a company is formed under foreign laws but is managed wholly in India, it is also said to be domestic for the purpose of Indian Income-tax laws. A domestic corporate should ideally be registered under the Companies Act 2013.

Foreign Corporates: A company is called a foreign company if it does not belong to Indian origin or has its management or control cited outside India.

Corporate Tax Rates for Financial Year 2022-23

The effective corporate tax rate for any corporate house would have the following components:

  • Corporate tax
  • Surcharge (charged for corporates earning higher incomes) and
  • Education Cess (applied on corporate tax and surcharge above)

Corporate tax rates

For Domestic corporates

  • For a gross turnover of up to INR 400 crores in FY 2020-21, the corporate tax rate is 25%.
  • For a gross turnover above INR 400 crores in FY 20, the corporate tax rate is 30%.

The domestic corporate houses are also provided with an option to opt for a beneficial tax rate of 15% (if engaged in manufacturing) and 22% (subject to foregoing of certain benefits). These rates require satisfaction of an enumerated list of conditions as given under Indian Income-tax laws.

For Foreign corporates

  • Interest is charged at 5% or 20%
  • Royalty or Fee for technical services is charged at a 10% tax rate.
  • Any other kind of income is charged at a rate of 40%

Above rates are subject to rates given in Tax-treaty with the country in which the foreign corporate is domiciled.

Surcharge rates

For Domestic corporates

  • If the income range is from INR 10 Mn to 100 Mn, surcharge is 7% on corporate tax rate.
  • If the income range surpasses INR 100 Mn, surcharge rate is 12% on corporate tax rate.

For Foreign corporates

  • If the income range is from INR 10 Mn to 100 Mn, the tax rate is 2% for foreign companies.
  • If the income range surpasses INR 100 Mn, foreign companies’ tax rate is 5%.
Income of a company/corporate

To calculate corporate tax on the revenue of your business, it is important to know about the major factors which contribute to the income of a company/corporate.

  • Earning from business operations
  • Profits/Rent from properties let out
  • Capital gains on transfer of assets
  • Other sources which may include interest income and dividends
Corporate Tax Planning

Corporate tax planning means strategizing your business’s financial affairs to enhance profit and lower payable tax by managing the advantages of deductions, exemptions, and rebates.

Corporate tax solutions are a risky and tricky process that involves a big amount at stake. Thus, you need a professional corporate tax service provider to handle your taxation process.

In India, you have the best financial players offering corporate tax consulting and implementing services. Persistence and complete awareness of current tax regulations and relevant rules and laws are necessary to ensure efficient corporate tax planning.

Corporate tax planning involves the act of planning your finances in such a manner that the payable amount gets reduced, and the gains get enhanced. An amazing feature of tax planning is that it is completely in sync with the regulations and financial rules set by the Indian Government.

Accessible Deductions

Reducing payable taxes is done through deductions, rebates, and exemptions, along with efficient management and auditing of the company’s expenses. These deductions include:

  • Capital gains that are taxed at a rate of 15% or 20% or exempted u/s 54D, 54GA, 54G, and 54EC.
  • Deductions related to new employees under section 80JJAA.
  • Deductions related to depreciation, additional depreciation as per section 32 that allow for a flat 15% off for the old asset depreciation and 20% on the purchase of assets for your company.
  • Deductions that are eligible for rebates in specific scenarios.
  • Donations to charitable companies which are 50 to 100% tax exempted under Section 80G as per the terms and conditions.
Measures for suitable corporate tax planning

Along with the above deductions, check out some measures to save corporate tax. These corporate tax solutions depend completely on how the company plans its tax-saving strategies.

  • Proper management of expenditure: Often, businesses in India operate with unorganized labor, which hampers efficient record keeping. Hence, it is essential to maintain appropriate reports of wages, overhead expenses, etc., to claim deductions in labor and production expenditure.
  • Valuation of equity: Though stock prices are calculated at cost, sometimes stocks with shorter shelf lives are valued at their Net Realizable Value, preventing them from getting overvalued and restricting your capital gains taxable income.
  • Deductions: Use deductions to regulate taxable income and their efficient management to save corporate tax.
Key services of Corporate Tax Consulting Services

When you think of business, tax automatically comes into the picture. Hence, to avoid issues and uncertain losses to tax, it is essential to take corporate tax consulting services from time to time. Efficient planning mitigates the risk. With effective corporate tax consulting services, you can focus on helping business owners make informed tax decisions and execute methods to handle tax affairs to support your business operations and deal with non-compliance.

Steadfast Business Consulting is your one-stop solution to corporate taxation. The company helps deal with issues like effective tax planning, compliances and post-tax filings the resulting assessments and litigation management. The major corporate tax services offered by SBC are:

  • Compliance: Compliance services involve day to day tax filings, calculations before and after registration of the company in India, compliance support linked to preparation and filing of corporate tax returns, withholding tax returns etc.
  • Consultancy services: The company offers corporate tax consulting services. The professionals at SBC are aware of the consistent changes in the economic environment and offer effective tax advice.
  • Health checkup: The professional does detail health checks of the business operations to acquire tax incentive advantages, reduce prospective exposure and enhance the tax compliances.
  • Litigation Services: Preparation of responses to the notices, arguments, and appeals before the income tax office and appellate bodies of the Tax system, to acquire NOC and manage advance ruling proceedings; SBC manages everything.

SBC aims to strike the right balance and help you save corporate taxes using deductions and rebates. The firm aims to understand the situation of your company and help you in the long run by enhancing your company’s gains and tax effectiveness. At SBC, the professionals realize the complexities of corporate tax and their nitty-gritty’s. That’s where their expert team of professionals enters. With expertise in corporate taxation laws, they will help you get the best results for your corporation tax.

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