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TMI BlogWholly Owned SubsidiaryX X X X Extracts X X X X X X X X Extracts X X X X ..... Hi, I have a query on the Corporate Tax Rate of a Wholly Owned Subsidiary of a Foreign Company. A company is registered in India as a Private Limited Company, 100% equity is being held by the foreign entitiy. Query , For Income Tax Purpose 1) would this be treated as a foreign company and taxed @40% 2) or it would be treated as a domestic company and taxed @ 30% Please advice the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons for the answer quoting the reference of the constitution if any Many thanks Regards Ramesh - Reply By MOHAN S - The Reply = Dear Mr.Ramesh, Kindly read the definition of a "Foreign Company" and "domestic company" under Income Tax Act 1961. The answer is clearly available there. - Reply By Bakul Gandhi - The Reply = Generally, a subsidiary company is a legal entity distinct from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he holding company and will be taxed at 30% as Domestic Company. However, if the subsidiary company is construed as PE-Permanent Establishment- of holding company in terms of relevant Double Taxation Avoidance Agreement, it will be taxed at 40%. whether subsiidiary is PE or not - refer to P.No 8 of 1995 223 ITR 416 (AAR) - Reply By KR Ramesh - The Reply = Dear Mr. Gandhi, Many thanks fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r giving the direction, Indeed it is highly appreciated. Kind Regards Ramesh - Wholly Owned Subsidiary - Query Started By: - KR Ramesh Dated:- 22-7-2011 Income Tax - Got 3 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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