As a Freelancer, if I register my company in Singapore then what Tax benefits can I get from it as an individual. I understand that there are two ways I can get income from a company, salary and dividend. How will they be taxed in India?
If you are indian resident.
Even if you register your individual company in singapore all profit you bring to india in the form of dividend, interest or salary will be subject to tax in india.
So ideally structure to set company in tax free country and to park profit there without bringing to india and only required fund shluld be transferred as profit
If you are a resident Indian, salary and dividend that you receive will be taxable in India. Co's income will be taxed in Singapore.
Salary will be taxed as per slab rate and dividend will also be taxed as per slab rate in India.
However more than that if you are registering a company in Singapore and sitting in India and controlling it, it could lead to company having a PE and POEM in India and which could lead to taxation all income of company in India, further if you are sitting in India and drawing salary that company will have to register for TDS in India and deduct TDS.
Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.
Thank you.
- Scope of total income and incidence of tax depends on the residential status in a previous year.
- Assuming place of effective management of foreign co. will be from India then Foreign Co. would be deemed as resident of India. Foreign co. whose turnover/gross receipts is less than Rs.50 Cr is always be non-resident. If turnover would be more than Rs.50 Cr then POEM will be applicable to determine residential status.
- Assuming you as an Individual would be resident in India then global income would be taxable in India.
- Resident is liable to pay tax on global income in India subject to DTAA. Non-Resident is liable to pay tax on Indian income.
For detailed discussion you may opt for phone consultation.
Whatever Income you may earn from company be it salary or dividend the same would be taxable in India so far as you are resident.
Additionally if the turnover of Singapore co is more than Rs. 50 Crores, if the same is managed by you entirely from India, the Co would be regarded as Indian resident co. The Income of the company would then be taxed at 40%.
Kindly reach out for detailed consultation to help you with the structure.
Dear Sir,
If you are resident Indian then your global will taxable but you can take benefits of DTAA.
For details discussion please have a phone consultation.
Thanks and Regards
CA Karishma chhajer
