Foreign Subsidiary Company Compliance

Foreign subsidiary are required to maintain compliance under Income Tax, Companies Act and various other regulations.

What is Foreign Subsidiary Company Compliance ?

Foreign subsidiary companies are mandatorily required to maintain compliance as per Income Tax Act, Companies Act, transfer pricing guidelines and FEMA guidelines. Hence, maintaining compliance for a foreign subsidiary company would includes filing of income tax return with the Income Tax Department, annual return with the Ministry of Corporate Affairs and other filings with authorities like Reserve Bank of India or Securities & Exchange Board of India (SEBI). Finally, like all companies, foreign subsidiaries would also have to comply with other Indian tax regulations like TDS regulations, GST regulations, VAT / CST regulations, Service Tax regulations, ESI regulations and others. The compliance requirement for a foreign subsidiary company would vary based on the industry, state of incorporation, number of employees and sales turnover.


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4 Essential Facts On Foreign Subsidiary Company Compliance

GST Filing

Under the GST regime proposed to be rolled out in 2017, one person companies having GST registration would be required to file monthly, quarterly and annual GST returns


ESI Return

ESI return must be filed by all one person companies having ESI registration. ESI registration is required once the one person company employs over 10 employees.


TDS Filing

Quarterly TDS returns must be filed by one person companies that have TAN and are required to deduct tax at source as per TDS rules.


Service Tax or VAT

In case a one person company has service tax or VAT registration, it must file the respective returns. Service tax returns are due half-yearly while VAT return due date changes from state to state.