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International Taxation & Transfer Pricing

Business Startup Consulting Services

The India advertise has steadily become an appealing business sector for remote business visionaries. India is the quickest developing economy on the planet, positioning with the third-biggest economy by obtaining power equality and the world’s 6th biggest economy by ostensible GDP. Entering the Indian market is a convoluted procedure inferable from social and topographical contrasts. Approximately 543,000 new organizations are propelled each month, be that as it may, many flop because of hindrances like savage challenge, monetary administration, absence of arranging, money related emergencies, less information on a specific subject, and so on.

In spite of the attack of investment assets in the startup biological system, a few organizations battle to proceed in the common challenge and eventually shut down activities inside the 5 years of Startup. From this time forward, it is critical to fathom the elements that are halting the development and maintainability of new businesses. In this aggressive business world, you should be adaptable and think greater to support in the contention advertise situation with incredible arranging, appropriate showcase/client examine, the correct decision of business consultancy and top authoritative abilities.

Legal Issue and Challenges

Legal Challenges are one of the biggest challenge encountered by startup companies. The startup companies might lend up into trouble when the company fails to meet all the legal requirements.

For a startup, it is not possible to pool in resources equal to the deep-rooted corporate house. However, with proper knowledge and support from the right consultancy, the risk can be prevented or diminished.

 

  • Business structure: First and foremost thing about business is to classify the top requirement of the business. Based on the set of requirement, the structure of the business is articulated such as sole partnership, proprietorship, a public company, private limited company, or a limited liability partnership. There are certain legal requirements that need to be followed for each business structures.
  • Taxation: Full acquiescence with tax laws is compulsory to avoid punishment and penalties. Startups must have inclusive knowledge about their tax liabilities towards the state and central governments. Startups should ensure that they are aware of the new taxes, its impact on the business model and their liabilities.
  • Business licenses: To ensure your business run without any trouble, the required licenses have to be attained. Most licenses are based on industry-specific. For instance, a startup food business has to obtain licenses relating to food safety, health, and food adulteration. The conditions mentioned in the license have to be fulfilled to avoid further complication.
  • Labor Laws: When a startup inaugurates operations and employs employees, it is subject to the countries labor laws. The major challenge for startups is to safeguard that it is compliant with all the appropriate labor laws. These laws relate to minimum wages, provident fund, payment of gratuity, maternity benefits, and prevention of sexual harassment at the office, etc.
  • Listing Requirements: A company has to comply with relevant SEBI regulations to list its securities in a stock exchange. These are regularly updated, and hence it is important for a startup to be well-versed of all the up-to-the-minute developments.
  • Protection of Intellectual Property: With the growth in startup entrepreneur, the company needs to create intellectual property (IP) simultaneously comprises of codes, research findings, algorithms, designs, etc. This is done to protect the IP from misusing by other entities or competitors and gain profit. Basic tenets of intellectual property rights should be considered such as copyright protection, trademark registration, patent filing, etc.

Business Operation Ease

The position of India brought to 77 up in 2018 from 100 out of 2017 among 190 nations took an interest in World Bank Ranking. Simplicity of Doing Business improved from 124.82 in 2008 until 2018, to 139 of every 2010 and holding a record of high to 77 out of 2018.

As of late, the Indian startup condition has truly taken off and exuded into consideration all alone—persuaded by factors like monstrous subsidizing, developing innovation, union exercises, and an expanding local market. The measurements are portraying—from about 3000 new companies in 2014 to a gauge of more than approx. 11000 by 2020, this is surely not a passing pattern. It has acquired an upset the business and spurred youthful ability to begin their own organization by getting extraordinary inspiration from an effective startup business visionary. India is changing at the quickest rate and opening entryway for a worldwide business person to build up a business in India and develop at a quicker pace. We at ASC help organizations with start to finish warning and counseling to set up your business for passage into India.

 

Tax Metrica Advantage

Tax Metrica offers a wide scope of administrations for firms performing redistributing exercises. Notwithstanding giving monetary administrations, for example, bookkeeping and finance, we likewise offer MIS detailing and the executives arrangements. Our modified arrangements empower associations to boost reach and benefit.

Tax Metrica Services

  • General Payroll Accounting.
  • Payroll reconciliations.
  • Payroll processing.
  • MIS Reports for all levels of management.
  • Payroll Taxation
  • Payroll Audit

Business Growth is your Friend

  • Expenses
  • Business Profit
  • Company Growth

Managing accounting

Management accounting focuses on the measurement, analysis and reporting of information that can help managers in making decisions to fulfil the goals of an organization. In management accounting, internal measures and reports are based on cost-benefit analysis, and are not required to follow the generally accepted accounting principle (GAAP).

Tax accounting

Tax accounting in the United States concentrates on the preparation, analysis and presentation of tax payments and tax returns. The U.S. tax system requires the use of specialised accounting principles for tax purposes which can differ from the generally accepted accounting principles (GAAP) for financial reporting.[36] U.S. tax law covers four basic forms of business ownership: sole proprietorship, partnership, corporation, and limited liability company.

Accounting firms

Depending on its size, a company may be legally required to have their financial statements audited by a qualified auditor, and audits are usually carried out by accounting firms.

Accounting firms grew in the United States and Europe in the late nineteenth and early twentieth century, and through several mergers there were large international accounting firms by the mid-twentieth century. Further large mergers in the late twentieth century led to the dominance by the auditing market by the Big Five accounting firms: Arthur Andersen, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. The demise of Arthur Andersen following the Enron scandal reduced the Big Five to the Big Four.

Yes, if you are a U.S. citizen or a resident alien living outside the United States, your worldwide income is subject to U.S. income tax, regardless of where you live. However, you may qualify for certain foreign earned income exclusions and/or foreign income tax credits. Please refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, for additional information

You have to file a U.S. income tax return while working and living abroad unless you abandon your green card holder status by filing Form I-407, with the U.S. Citizen & Immigration Service, or you renounce your U.S. citizenship under certain circumstances described in the expatriation tax provisions. See Publication 519, U.S. Tax Guide for Aliens, for more details.

The due date for filing a federal individual income tax return generally is April 15 of each year if your tax year ends December 31st. Your return is considered filed timely if the envelope is properly addressed and postmarked no later than April 15, Publication 17, Part 1 – When do I have to file?

If the due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. If you cannot file by the due date of your return, you can request an extension of time to file. To receive an automatic 6-month extension of time to file your return, you should file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, by the due date of your return. For more information, refer to the Form 4868 instructions.

However, if you are a U.S. citizen or resident alien, who is either: (1) living outside of the United States and Puerto Rico and your main place of business or post of duty is outside of the United States and Puerto Rico; or (2) in military or naval services on duty outside of the United States and Puerto Rico on the due date of your return, you are allowed an automatic 2-month extension until June 15 to file your return and pay any tax due. For additional information refer to Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. If you use this automatic 2-month extension, you must attach a statement to your return explaining which of the two situations qualify you for the extension.

You can check the status of any refund you expect as soon as 24 hours after you e-file a return or 4 weeks after you file a paper return. If you included Form 8379, Injured Spouse Allocation, wait 11 weeks if you filed your return electronically or 14 weeks if you mailed a paper return.

There are several ways to check the status of a refund

There are various options for paying your U.S. taxes.

  • EFTPS (Electronic Federal Tax Payment System).
  • This is only available if you have a U.S. bank account.
  • Federal Tax Collection Service (same-day wire transfer).
    If you do not have a U.S. bank account, ask if your financial institution has a U.S. affiliate that can help you make same-day wire transfers. For more information on this option, refer to the Foreign Electronic Payments webpage.
  • Check or money order.
    To pay by check or money order, make your check or money order payable to the “United States Treasury” for the full amount due. Do not send cash. Do not attach the payment to your return.
  • Credit or debit card.
    This option is useful if you do not have a U.S. bank account.  Refer to the Pay Your Taxes by Debit or Credit Card webpage with details regarding this process and fees.

For more information on these payment methods, go to the Electronic Payment Options webpage.

Transfer pricing regulations govern the intercompany prices of transactions within a multinational company. The cross-border transfer prices of goods, royalties, services, and loans drive how much income tax a multinational company pays by country. Transfer pricing is widely considered the most contentious tax issue for multinational companies, and all companies with cross-border operations have transfer pricing issues.

Simply stated, tax authorities are concerned about multinationals underpaying taxes through incorrect transfer prices.

  • Transfer pricing audits can result in substantial tax and penalties on a global basis.
  • Over 100 countries now see transfer pricing enforcement as a top return on investment in auditing resources.
  • Transfer pricing impacts a company’s global effective tax rate.
  • Transfer pricing also affects FDII, GILTI, and BEAT calculations under US tax reform.

We find that many companies can optimize cash flow with a strategic review of transfer prices. Furthermore, US tax reform provides new opportunities to reduce taxes payable through transfer pricing strategies.

Companies that do not charge arm’s length prices are at risk of substantial additional income tax, interest, and nondeductible penalties.

  • Tax auditors can raise substantial tax revenues through transfer price adjustments.
  • Two (or more) tax authorities can audit the same transactions.
  • Companies can face a double taxation problem – if one tax authority makes a transfer pricing adjustment, a company may not necessarily receive a refund on the tax already paid overseas.
  • Resolution of transfer pricing audits regularly requires five-plus years of management time and resources.

Under audit, tax authorities in the US and internationally can demand evidence that cross-border prices are charged on an arm’s length basis.

  • Annual transfer pricing documentation reports are prepared to justify intercompany prices to tax authorities under audit.
  • A documentation report provides companies their first and best chance to avoid a transfer pricing audit in the first place.
  • Depending on company size, many countries require annual transfer pricing documentation.
  • For some situations, a transfer pricing benchmarking analysis may be a more cost-effective solution.

We have extensive experience in preparing US Organization for Economic Cooperation and Development Base Erosion and Profit Shifting (OECD/BEPS) transfer pricing documentation. We can also update your existing transfer pricing documentation for annual compliance purposes.

Subsidiaries that generate minimal profits or incur losses are regularly audited for transfer pricing.

  • Tax authorities argue that subsidiaries operating at arm’s-lengthwould not agree to transact with companies without earning reasonable returssns.
  • Auditors often reject the argument that poor market conditions, rather than incorrect transfer prices, are the cause of losses.

Conversely, tax auditors of parent companies raise concerns over subsidiary companies generating large profit margins.

  • Tax authorities question why companies would effectively shift profits to offshore companies that have limited functions, assets, and risks.
  • Coca-Cola and Facebook are prime examples of companies facing contentious audits, where subsidiaries are earning “too much” profit.

We find that multinational companies employing the following strategies are best placed to optimize transfer pricing:

  • Implement intercompany contracts to specify roles, responsibilities, and ownership of intangibles for each country entity.
  • Review profit margins and taxes payable on a country-by-country basis for all open tax years.
  • Monitor and adjust intercompany prices during the year to avoid surprises at year-end.
  • Prepare transfer pricing documentation for high volume, higher-risk transactions.
  • Ensure that transfer pricing reports meet the requirements of all tax authorities involved, with a consistent explanation of the business.