Foreign Subsidiary Company Compliance

Foreign subsidiary companies are mandatorily required to maintain compliance as per Income Tax Act, Companies Act, transfer pricing guidelines and FEMA guidelines. Hence, maintaining compliance for a foreign subsidiary company would includes filing of income tax return with the Income Tax Department, annual return with the Ministry of Corporate Affairs and other filings with authorities like Reserve Bank of India or Securities & Exchange Board of India (SEBI). Finally, like all companies, foreign subsidiaries would also have to comply with other Indian tax regulations like TDS regulations, GST regulations, VAT / CST regulations, Service Tax regulations, ESI regulations and others. The compliance requirement for a foreign subsidiary company would vary based on the industry, state of incorporation, number of employees and sales turnover.

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Major Compliances for a Foreign Subsidiary Company

Income Tax & Annual Return

Income tax filing and annual return filing must be completed by all One Person Company before 30th September of each financial year.

GST Filing

Under the GST regime proposed to be rolled out in 2017, one person companies having GST registration would be required to file monthly, quarterly and annual GST returns.

ESI Return

ESI return must be filed by all one person companies having ESI registration. ESI registration is required once the one person company employs over 10 employees.

Service Tax or VAT

In case a one person company has service tax or VAT registration, it must file the respective returns. Service tax returns are due half-yearly while VAT return due date changes from state to state.