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International Taxation

We help enterprises formulate effective strategies to optimize their taxes, implement innovative tax planning strategies and effectively manage compliance-related requirements

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Strategize Tax
Litigations
Foreign Exchange Filing
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Assist in Obtaining
Regulatory Approvals

International Tax Services (ITS) provides corporate income tax advice on all aspects of cross-border transactions, including financing and structuring, transfer pricing, and operating model effectiveness. A global network of international tax professionals helps clients manage their business tax responsibilities, including managing global tax risks and meeting cross-border reporting obligations.

In a globalized world, there are changes coming from many directions and at a high speed. Therefore, it is important for a multinational corporations (MNCs) to be able to identify trends and their impacts as early as possible.

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The Lex Koterie LLP is leading professional firm consisting team of dedicated and experienced international tax practitioners & professionals with technical & practical knowledge in practical fields. We provide worldwide up-to-date, country specific knowledge and information & manages the risk of multiple tax processes & regulations across the globe. Notably, our services include:

BEPS-PROOF TRANSFER PRICING HEALTH CHECK​

A diagnostic health check will identify inappropriate BEPS transfer pricing policies and inadequate documentation from a BEPS and local standpoint. This will provide a clear summary of potential issues.

DEVELOPMENT OF TRANSFER PRICING MECHANISMS AND POLICIES

We will develop your transfer pricing policies and ensure they conform to OECD and local
country principles and regulations.

Preparation of transfer pricing documentation based on a functional analysis

We can help you prepare robust documentation to support the arms-length pricing nature of your related party transactions, including supportive transfer pricing studies and reports.

ADVANCE PRICING
AGREEMENTS

We assist throughout the negotiation process with a tax authority to agree a specified transfer pricing method which can be applied to certain transactions and remove uncertainty.

RESPONSES TO TRANSFER PRICING QUESTIONS FROM THE AUTHORITIES

We assist you in responding to tax authority queries, in any jurisdiction, where rational explanations of why your related party transactions comply with local regulations are required.

REPRESENTATION AND DISPUTE RESOLUTION

We will assist you to defend against  additional tax assessments resulting from administrative or legal challenges to your transfer pricing policies.

Most Trivial Direct Taxes

Transfer
Pricing
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DTAA (Double Taxation Avoidance Agreement)
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Taxation of
Expatriates
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Services to NRI (Non-Resident Individual)
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FEMA (Foreign Exchange Management Act)
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IFRS (International Financial Reporting Standards)
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Years of Experience

We work with ambitious leaders who want their future to be successfull and help them achieve extraordinary outcomes.

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Through our service lines, we help our clients capitalize on transformative opportunities - now, next & beyond.

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Together, we help you create lasting value & responsible growth to make your business fit for tomorrow.

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AbouT Lex

Lex Koterie LLP is one of the leading professional group involved in Taxation consultancy services, GST, Audit and Assurance, Secretarial and Corporate Law Services, Mergers and Acquisition to Corporate Financial and Risk Advisory, accounting/ related support and outsourcing services.

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Transfer Pricing

The Transfer Pricing Regulations (TPR) were introduced in India to dive the Finance Act, 2001 by substitution of the existing 92 and introduction of new sections  92A to 92F in the Income Tax Act (‘Act’) and relevant rules 10A to 10E in the Income Tax Rules, 1962. International business is faced with increasing transfer pricing documentation requirements, together with changing laws and regulations.

Purpose of Transfer Pricing

The key objectives behind having transfer pricing are:

  • Generating separate profit for each of the divisions and enabling performance evaluation of each division separately.
  • Transfer prices would affect not just the reported profits of every center but would also affect the allocation of a company’s resources (Cost incurred by one center will be considered as the resources utilized by them).

We at Lex Koterie LLP, have a long-standing experience in the field of international transfer pricing, transactions structuring and transfer pricing compliances, transfer pricing documentation in a more qualitative manner. In addition, adequate tax advice will also suggest and consulting on setting ARM’s lengths price and adoption of the most appropriate method. Our study involves the analysis of contemporaneous facts and research from public databases also to analyze the correct Price Comparison of functional elements and the like.

Key Triggers
  • Review, document, manage, and defend client’s transfer pricing policies and processes-aligned with their business strategy.
  • Build proactive, pragmatic, and integrated strategies that address the tax risks.
  • Document transfer pricing policies in a coherent and consistent fashion.
  • Litigation support & resolving transfer pricing controversies.

DTAA (Double Taxation Avoidance Agreement)

DTAAs can either be comprehensive to cover all sources of income or be limited to certain areas such as taxing of income from shipping, air transport, inheritance, etc. Due to globalization, the integration and cross-border transactions with foreign countries are increasing. DTAA has entered into International Taxation issues to intensify the cross-border financial transactions.

We at Lex Koterie LLP provide DTAA consultancy and tax compliances to both Indian & Multinational Clients. Our experts provide tax management services to NRIs by following the jurisdiction of the Indian laws and regulations along with overseas countries & Double Taxation Avoidance Agreements (DTAA).

Purpose of DTAA
  • Avoidance of Double Taxation of Income with transparency.
  • Recovery of Income Tax in both countries.
  • Allocate rationally, equitable, and fairly the taxing rights over a Taxpayer’s Income between two states.
  • Encourage free flow of international Trade & Investment and Technology.
When and how to get relief under Double Taxation Avoidance Agreement (DTAA)?

An NRI can go with only domestic provisions of countries involved without considering DTAA unless considering provisions of DTAA is beneficial for him. For DTAA, he shall get Tax Residency Certificate (TRC) from the resident country and fill a self-declaration Form F while filing the tax return in India. These documents shall be kept as a record for future references or may have to submit to Indian Income-tax authorities in case of any inquiry.

In case you have questions related to residential status in India or seek DTAA advice, Lex Koterie LLP can assist you.

Taxation of Expatriates

With the increased Globalization, India opening its economy & many foreign Companies choose India as their destination to expand their business operations by either setting up a Liaison Office or a Branch office or a subsidiary Company or a Joint Venture Company in India. Initially, they prefer to deploy their foreign employee in India to set up their business in India.

The scope of taxability of income of such Expatriate primarily depends upon his Residential Status in India as explained in the below chart:

Normally, a foreign citizen (taxation expatriates) works in India, their entire salary-related income is subject to tax, even if it is paid outside India. For taxation purpose salary includes:

  • Basic salary.
  • Cost of living allowances.
  • Bonus.
  • Ex-gratia.
  • Reimbursement of school fees.
  • Utilities, house rent & transportation.
  • Tax reimbursements and other payments the company makes on behalf of the employee.
  • Certain in-kind benefits, such as company-leased accommodations, security guards, provision of the car with the driver, are all taxable on a concessional basis.

We at Lex Koterie LLP, having a team of experienced & dedicated experts who provide efficient solutions to expatriate taxation problems & our professionals offers distinct and fruitful strategies to handle any tax-related matters such as withholding obligations, Dual Taxation, Tax compliance issues, foreign bank report filing, Language barriers, and several tax liabilities.

Services to NRI (Non-Resident Individual)

India has turned into a splendid investment destination for Non-Resident Indians and persons of Indian origin. A growing & robust economy, a strong rupee and profitable companies have together ensured that investors get maximum returns from both equity & debt markets. A highly transparent and automated stock exchange & a resonant mutual fund industry have ensured that investments are liquid & transparent. Taking advantage of this environment & our proven experience in the market.

We offer the entire gamut of financial planning & advisory services to NRIs & also provide additional services such as tax filing in India.

Not just to the local client base, Lex Koterie LLP offers a whole spectrum of NRI Services in India for foreign clients handling NRI investment related queries, providing excellent solutions for setting up a business in India, Banking Solutions to assisting returning/emigrating Indians- our NRI Consultancy Services involves all these aspects & many more. Our experienced & dedicated team has successfully provided effective solutions to many foreign clients over the years.

We have creditable experience in providing a multitude of services to a diverse client’s profile. Non-resident Indians comprise a substantial portion of our client base which includes as under;

  • Non-resident Indians who have/ intend to have investments in India.
  • Non-resident Indians who inherit assets in India.
  • Non-resident Indians/Non-residents who have the intention to set up a business in India.
  • Returning NRI.
  • Emigrating Indian/New NRI.
  • NRI Intending to remit funds from India to Abroad.

FEMA (Foreign Exchange Management Act)

The Government of India formulated FEMA or Foreign Exchange Management Act to encourage the external payments and across the border trades in India. It was formulated in the year 1999 while it replaced FERA (Foreign Exchange Regulation Act). It was primarily formulated to de-regularize and have liberal Indian economy.

The hands-on experience of Lex Koterie LLP with strategy formation and foreign compliance services structure your business in the most ideal way. With our compliance and advisory expertise, we have been successfully structuring the businesses of our clientele.

Applicability of FEMA Act
  • Foreign exchange.
  • Foreign security.
  • Exportation of any commodity and/or service from India to a country outside India.
  • Importation of any commodity and/or services from outside India.
  • Securities as defined in the Public Debt Act 1994.
  • Banking, financial, and insurance services.
  • Sale, purchase, and exchange of any kind (i.e. Transfer).
  • Any overseas company that is owned 60% or more by an NRI.
  • Any citizen of India, residing in the country or outside (NRI)
Major Provisions of FEMA Act 1999:

Here are major provisions that are part of FEMA (1999) –

  • Free transactions on current accounts subject to reasonable restrictions that may be imposed.
  • RBI controls over capital account transactions.
  • Control over the realization of export proceeds.
  • Dealing in foreign exchange through authorized persons like an authorized dealer or money changer etc.
  • Appeal provision including Special Director (Appeals).
  • Directorate of enforcement.
  • Any person can sell or withdraw foreign exchange, without any prior permission from RBI and then can inform RBI later.
  • Enforcement Directorate will be more investigative in nature.
  • FEMA recognized the possibility of Capital Account convertibility.
  • The violation of FEMA is a civil offense.
  • FEMA is more concerned with management rather than regulations or control.
  • FEMA is a regulatory mechanism that enables RBI and the Central Government to pass regulations and rules relating to foreign exchange in tune with the foreign trade policy of India.

IFRS (International Financial Reporting Standards)

IFRS are set of accounting policies and rules developed by International Accounting Standard Board (IASB). An object to bring consistency in the accounting practices and principles followed by companies of various nations while preparing financial statements. It brings synchronization in accounting practices across various nations to facilitate a comparison of financial statements. It is of more significance for those companies which have dealings in several countries.

We apply a top-down, risk-based approach to implement a cost-effective compliance process. Our professional carries out an independent post-implementation review to assist the management in a proactive assessment impact on the business and financial models with respect to fundamental issues and disclosure norms under IFRS.

Our flexible & comprehensive approach is driven by a customized road map that addresses each client’s immediate priorities, planned improvements, longer-term strategic improvements and designated timetable.

Benefits of IFRS

IFRS have many benefits, some of which are discussed below:

1. Wider acceptability:

IFRS are widely acceptable. It is applicable to almost 166 jurisdictions out of which approximately 144 jurisdictions have adopted IFRS Thus, financial statements prepared as per IFRS are widely acceptable.

2. Comparability of Financials:

Since IFRS are global standards, companies of different nations following IFRS can be easily compared.

3.  Elaborated Guidance:

IFRS provides elaborated guidance on how to apply principles given in standards in different situations.

4. Changes in standards as per economic situations:

Principles of IFRS are revised/modified in case there is any major change in economy.

We provide IFRS Conversion, Planning & Advisory Services related to IFRS