Tax Planning Services for Subsidiary Company: Boost Your Profitability & Efficiency

Ensuring effective tax management is vital for subsidiary companies operating in a competitive environment. Tax planning services for subsidiary company are designed to handle complex tax regulations, minimize liabilities, and optimize financial outcomes, providing a solid foundation for growth and compliance.

Explore with us the essential aspects of tax planning for subsidiaries including their key tax obligations and the kinds of services offered. We also discuss what makes PKC Management Consulting a preferred choice for these services. 

Tax Obligations of a Subsidiary Company in India

A subsidiary company operating in India is subject to a complex tax regime. Understanding and fulfilling these tax obligations is crucial for smooth business operation. Some of the main tax requirements include:

• Corporate Income Tax: This is a tax laid on their profits. The taxable income includes that from operations, investments, and any other source of revenue. 
• Minimum Alternate Tax (MAT): MAT ensures that companies with substantial profits but lower taxable income still pay a minimum level of tax.
• Transfer Pricing Compliance: Subsidiary companies engaged in inter-company transactions must adhere to transfer pricing regulations. These rules require transactions between related parties to be conducted at arm’s length prices.
• Goods and Services Tax (GST): If a subsidiary’s turnover exceeds the prescribed limit, it must register for GST. The subsidiary must file regular GST returns, maintain proper records of sales and purchases, and ensure timely payment of GST.
• Withholding Tax: Subsidiaries must withhold tax on dividends paid to non-resident shareholders as per applicable tax treaties or domestic tax laws.
• Tax Audit: Subsidiaries must undergo a tax audit if their turnover exceeds  the specified limit. The auditor must provide a detailed report on the company’s tax compliance and financial statements, along with the tax return.
• Annual Filing of Tax Returns: They are required to file their annual income tax returns within the specified due date. Accurate financial statements, tax calculations, and supporting documents must be filed with the tax authorities.
• International Tax Compliance: Subsidiaries operating across borders must comply with Double Taxation Avoidance Agreements (DTAA) provisions to avoid double taxation and benefit from reduced withholding tax rates. They must also adhere to the reporting requirements under international taxation standards.

Key Aspects of Tax Planning Services for Subsidiary Company

Tax planning services for subsidiary company can take various forms. Some of the most common ones are:

Tax Optimization and Structuring

The subsidiary’s financial structure and operations are analyzed to recommend tax-efficient structures and strategies. This may involve restructuring the company’s debt and equity, or leveraging tax incentives. It helps reduce overall tax burden and enhances cash flow.

Compliance and Documentation Management

Assist with maintaining accurate records and documentation required for tax compliance, including tax returns, financial statements, and transfer pricing documentation. It ensures adherence to tax regulations, reduces risk of penalties, and simplifies the audit process.

Tax Credit Utilization

Involves identifying and claiming available tax credits, such as those for research and development (R&D), export incentives, or other government schemes. Helps with maximizing tax savings, thereby reducing the overall tax liability.

Transfer Pricing Strategy

Here service providers help you develop and implement transfer pricing policies that comply with local regulations and international standards. This includes setting arm’s length prices for inter-company transactions.

International Tax Planning

Experts provide guidance on international tax issues, including compliance with Double Taxation Avoidance Agreements (DTAA), repatriation of profits, and structuring cross-border transactions. It helps minimize exposure to double taxation and ensures compliance with global tax regulations.

Tax Risk Management

Tax advisors assess and manage potential tax risks, including conducting risk assessments, preparing for tax audits, and implementing strategies to mitigate risks. They help you reduce the likelihood of tax disputes and penalties, ensure proactive management of tax risks.

Tax Planning Services for Subsidiary Company: What Makes PKC Management Consulting A Preferred Choice?

PKC Management Consulting is one of the most preferred choices when it comes to providing tax planning services for subsidiary company, for the following reasons: 

Investment Mindset to Tax: 

We believe that tax planning is an investment in the future financial health of the business. By optimizing tax liabilities, we free up capital for growth, expansion, and shareholder value creation.

Technology-Driven Solutions

We emphasize the use of advanced technology and tools to streamline tax processes and improve efficiency. Using data analytics, we help you identify all the available tax optimization opportunities.

Holistic Tax Optimization Strategies

We offer a holistic view of tax optimization that integrates with your subsidiary’s overall business strategy. This includes leveraging tax-efficient structures, funding arrangements, and innovative financial instruments.

Strong Industry Experience

We have more than three decades of experience in working with subsidiary companies across various industries. This enables us to provide tailored solutions that are specific to your needs and financial goals.

Advanced International Tax Planning

PKC Management Consulting combines global tax planning expertise with local insights. Our experts thus enable your subsidiary to benefit from a well-rounded approach to international tax planning, enhancing operational efficiency and compliance.

Let PKC Help You Maximize Your Tax Savings !