• Taxation for doing business in multiple countries

Hi, I am from Australia, and I have a proprietorship company here in Australia, and I want to do a business, in which I will collect money from Indian consumers, as mass consumers (95%) of my users will be from India, rest maybe from China, Bangladesh, etc, and I want to pay to consultants in Australia and Canada & USA, 

I am unsure what the tax structure will be, and if I have to pay taxes in all these countries or Do I need to register my company in all these countries ?

Please help me understand If I can work with my Australian company and how the tax works in this scenario.
Asked 1 month ago in Income Tax



Hope you are doing well!!


I am telling regarding India only.If you are doing business with Indian consumers and generating income in India, you may be subject to Indian tax laws. The tax liability in India depends on various factors such as the type of business, the nature of income, and the presence of a permanent establishment in India.


The presence of a permanent establishment is a critical factor in determining tax liability in India. A permanent establishment means a fixed place of business, such as an office or factory, through which the business carries out its operations. If you have a permanent establishment in India, you will subject to Indian tax laws.


However, if you do not have a permanent establishment in India, you may still be subject to Indian tax laws if you have a significant economic presence in India. Under the recently introduced digital taxation framework in India, businesses with a significant economic presence in India, such as those with a large user base or generating significant revenue from India, subject to Indian tax laws.


If you are liable then you need to take PAN number in India and pay taxes on the income earned from those customers. Additionally, you may also be required to file tax returns in India.


Hope you find the information helpful. You are free to contact me for further discussion.If you could spare two minutes of your time to write a review, It would be really grateful and very happy to read it.


Thank you.

Shubham Goyal
CA, Delhi
38 Answers
1 Consultation

5.0 on 5.0

Dear sir,


This is a portal where we reply on tax queries related to India, however considering the question it can be said that if you are operating from Australia and paying to people from other parts of the world who are not your employee I don't think you would be required to pay any taxes in such country.


Hope you find the information helpful, if yes do rate if 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
4149 Answers
81 Consultations

5.0 on 5.0

- Assuming you will sell goods/services digitally then under Indian Income tax Act, if your value of sale consideration exceeds INR 2CR (i.e., INR 20 million) in a financial year then you would be liable to pay equalisation levy of 2% on the sale consideration value and income would be exempt u/s 10(50). If the value of sale consideration would be less than INR 2CR (i.e., INR 20 million) in a financial year then tax would be payable on the income under normal provisions. 

- It would be better if you incorporate a company in India as turnover from India region would be 95% of total turnover. Creating a company in India would eliminate chances of statutory and regulatory non-compliances in India.


For detailed discussion you may opt for phone consultation

Vivek Kumar Arora
CA, Delhi
4599 Answers
895 Consultations

5.0 on 5.0

In India since you are collecting amounts from users, you may be regarded as ecommerce operator. You may be required to pay equalisation levy in India at the rate of 2% of consideration received. This shall be applicable if your turnover exceeds Rs. 2 Crores.


Depending on laws of each jurisdiction you may be required to pay taxes and register. 


We can help you in detailed advisory for different jurisdictions. Please reach out for detailed consultation. 




Prerna Peshori
CA, Pune
137 Answers
2 Consultations

5.0 on 5.0

You only need to pay tax in country of your business registration which will be australia


For rest all countries it will be overseas trade 


With respect to payment to consultant based in differen country kindly note that withholding Tax (TDS) liability will come as per the australia treaty with out country and scope of work involved which is mandatory to comply

Vishrut Rajesh Shah
CA, Ahmedabad
877 Answers
35 Consultations

5.0 on 5.0

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