Movement of expatriates cross borders potentially creates
several tax and regulatory issues. These could involve deputation
or secondments from one group entity to another, or other
relatively short term arrangements where expatriates move to
another country for third party client projects. Key tax, social
security and exchange control issues (including applicability of
tax and social security treaties) in context of inbound expatriates
in India are briefly highlighted in this article. For the sake of
simplicity, any movement of employees for work is referred to as
deputation in the article.
Considerations for Employer Company
Presence of expatriates in India potentially creates Permanent
Establishment (PE) exposure for the foreign company in India.
Similarly, in cases involving cross charges of expatriate
remuneration to an Indian company (typically, intra-group
deputations), such cross-charges may be taxed in India.
