• Company in Dubai

Dear sir ,
I want to set up a company in dubai and I am a resident of india 
Is it important to declare that I have company in dubai to income tax authorities in india 
If I earn Profit in my company in dubai , is ut taxable in india ?
If not , then can income tax authorities in india ask me about the profits of my company in dubai in future ?
Asked 7 years ago in Taxation

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7 Answers

If you fall in the category of 'resident' and ordinary resident of India your global income will be taxable in India. This income may have been earned or received outside India, but it shall be taxed in India. Although your income earned outside India will be taxable in India, but you will get the benefit of DTAA (Double Tax Avoidance Agreement), if any, between India & the country where you earn income. Only the marginal tax, if liable, will be payable by you being the rate of tax higher in India.

Ashish Davessar
Advocate, Jaipur
30763 Answers
972 Consultations

5.0 on 5.0

1) you must disclose to income tax authorities your investments made in company in dubai and income earned by you on said investments

2) you will be taxed in India on Income generated by Investments made in dubai , which can be in the form of Dividends, Capital gains etc.;

3) if the control and management of company is done from india then income of company will be taxed in india

4) if control and management of company is abroad it s income will not be taxed in india

Ajay Sethi
Advocate, Mumbai
95197 Answers
7607 Consultations

5.0 on 5.0

if you do not receive any dividends from dubai company you would not have to pay any income tax since you are not receiving any income from said company

2) Undisclosed foreign income or assets shall be taxed at the flat rate of 30 per cent. No exemption or deduction or set off of any carried forward losses which may be admissible under the existing Income-tax Act, 1961, shall be allowed.

3) failure to furnish return in respect of foreign income or assets shall attract a penalty of Rs.10 lakh. The same amount of penalty is prescribed for cases where although the assessee has filed a return of income, but he has not disclosed the foreign income and asset or has furnished inaccurate particulars of the same.

Ajay Sethi
Advocate, Mumbai
95197 Answers
7607 Consultations

5.0 on 5.0

The term ‘Place of effective mangment ’ has been defined to mean “a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made”.

2) if for instance board meeting s of Dubai company are held in India place of effective management would be in india

3) if operational decisions are taken in india the control and management of company would be in india only

4) in case POEM is in India then its income would be taxed in india

Ajay Sethi
Advocate, Mumbai
95197 Answers
7607 Consultations

5.0 on 5.0

If an Indian Citizen, living in India owns a Company abroad, there is no problem with it, Provided this Investment is accounted and shown by him in his Books.

He (Individual) will be taxed in India on Income generated by Investments, which can be in the form of Dividends, Capital gains etc.;

Since its an offshore company (that is Incorporated Outside India) Taxability depends on 'Where is the control and management of company situated, ie: Where are the board meeting and General meetings of Company happens.

T Kalaiselvan
Advocate, Vellore
85398 Answers
2235 Consultations

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I m not talking about my income in dubai

Rather I m talking about the income or profit of thecompany which I own in dubai which will remain in the company and not brought in india

You have to reflect your income from all the sources in the income tax returns that you would be filing here in India, hence any income that has been derived out of this off shore business has to reflect in your income statement.

Disclose your Investments and Incomes from abroad in your Income Tax Return will be sufficient compliance as per Income Tax Laws.

T Kalaiselvan
Advocate, Vellore
85398 Answers
2235 Consultations

5.0 on 5.0

What is meant by control and management of company from india ?

I invest and make a company in dubai and that company is doing international trading from dubai and making profit in dubai , how can it be taxed ?

For Company: , depends on the residential status of Company whether Resident/Non-Resident.

Individual will be taxed on his Individual Income (Dividends and Capital) and,

Company will be taxed in its Home Country on its Incomes if its Non-Resident Company.

Company will be taxed in India on its Income, if its a Resident Company

[Our Indian Govt. also has DTAA (Double Taxation Avoidance Agreements) with many Govt's to avoid double taxation]

T Kalaiselvan
Advocate, Vellore
85398 Answers
2235 Consultations

5.0 on 5.0

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