Global Capability Centres (GCCs) and multinational companies are expected to seek clearer guidance on the tax treatment of cross border employee secondments after a recent
Delhi High Court judgment highlighted the need to examine the substance of such arrangements rather than their contractual form.
According to industry reports, NASSCOM is likely to engage with the government to seek greater clarity on how overseas employees deputed to Indian entities should be taxed. The issue has gained attention because secondment arrangements are widely used by multinational companies and GCCs operating in India for leadership deployment, knowledge transfer and operational support.
The discussion follows the Delhi High Court’s ruling in the EY US case, where payments made by an Indian entity to its overseas affiliate for seconded employees were held to be taxable as fees for technical services (FTS) rather than being treated as mere salary reimbursements. The court emphasised that the actual nature of the arrangement and the services rendered must be examined while determining tax liability.
Industry experts say the judgment could have broader implications for multinational companies that rely on international talent mobility and employee deputation models. As India continues to strengthen its position as a major GCC hub, businesses are seeking regulatory certainty to ensure that cross border workforce arrangements remain compliant and operationally efficient.
Source from: https://www.bwpeople.in/article/gccs-likely-to-seek-tax-clarity-after-delhi-hc-ruling-613765
