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Guiding Indian multinationals through global tax complexities with strategic clarity.
In brief
- Businesses face complex rules as they operate across borders.
- EY provides support in tax analysis, reporting, and compliance.
- Staying informed about international tax regulations is crucial for business success.
- Technology plays a vital role in streamlining international tax compliance processes.
As businesses expand into new markets, they encounter challenges related to international tax rules. These rules can be complex and differ from one country to another. Companies must understand how to comply with local tax laws, manage transfer pricing, and adapt to new digital tax regulations. There are several key aspects of international tax that businesses must consider for managing their tax responsibilities effectively.
Managing treasury and capital structure
Managing treasury and capital structures is crucial for Multinational Enterprises (MNEs). Companies must align their financial strategies with international tax regulations to minimize liabilities. This involves careful planning of intercompany financing, capital deployment and risk management strategies across jurisdictions. EY assists businesses in developing strategies that ensure treasury operations support overall objectives while complying with international tax standards.
With increased scrutiny from tax authorities and market changes, businesses must adopt effective strategies to reduce risks and improve international tax efficiency. The EY team consists of tax professionals that help client optimize their capital structures while remaining compliant with complex tax regulations such as India’s Thin Capitalization Rules under Section 94B of the Act, Organisation for Economic Co-operation and Development (OECD)'s Base Erosion and Profit Shifting (BEPS) guidelines, and evolving global anti-avoidance measures.
Optimizing business models and supply chains
Effectively managing business models and supply chains is crucial for companies operating internationally. As businesses expand globally, they must ensure their operations comply with various tax regulations in different jurisdictions. This includes adjusting procurement processes relocating functional experts, managing intangible assets, etc from the perspective of complying with transfer pricing regulations, and managing risks related to permanent establishments, etc. By focusing on these areas, companies can better align their operations with international tax standards and minimize potential tax liabilities. Our Operating Model Effectiveness (OME) team combines expertise from various fields, including Advisory, Assurance, Legal, and international tax, to help clients refine their business strategies and improve overall efficiency.
As businesses adapt to the changing international tax landscape, they need efficient corporate structures and treaty qualifications. EY assist clients in rationalizing legal entities to meet regulatory requirements while minimizing international tax liabilities across jurisdictions.
Cross-border tax operations
The demand for transparency in cross-border transactions has intensified, driven by evolving international tax standards and regulatory frameworks such as the OECD’s BEPS action plan. This change has led to more reporting obligations for clients particularly in the areas like transfer pricing, country-by-country reporting, and controlled foreign company regulations. Our International tax service team is well equipped to support businesses in India with compliance requirement for Indian operations as well as cross-border operations. By analysing the respective tax obligations, we assist our clients remain compliant while effectively managing their international tax compliance risks.
Transfer pricing and operating model effectiveness
Transfer pricing remains an essential part of international tax compliance, especially in light of increasing regulatory scrutiny and evolving global tax standards. Our EY transfer pricing team offers entire spectrum of transfer pricing services ranging from strategic advisory and documentation to litigation support and dispute resolution.
We assist clients in designing and implementing transfer pricing strategies compliant under Indian transfer pricing regulations as well as OECD guidelines and global best practices.
The approach to transfer pricing includes strategy development, governance, and decision-making processes that reduce the impact of year-end adjustments. By combining deep technical expertise with industry insights and monitoring transfer pricing footprints of client across various jurisdictions, we assist our clients navigate the complexities of international tax regulations.
A new era in international taxation
The introduction of Base Erosion and Profit Shifting (BEPS) 2.0 marks a significant change in the international tax landscape. Moreover, Foreign Direct Investment (FDI) inflows have steadily increased, rising from $36.05 billion in FY 2013-14 to a provisional $81.04 billion in FY 2024-25, according to the Ministry of Commerce and Industry. This growth in FDI highlights the increased requirement for effective international tax strategies for businesses looking to invest and expand globally2.
Our team at EY support clients across the entire gamut of international tax matters, including strategic advisory for cross-border structuring, tax-efficient market entry, and global expansion aligned with Pillar Two requirements. Our teams assist clients in assessing the impact of Pillar Two’s Global Minimum Tax, conducting readiness diagnostics, and implementing compliance frameworks that meet both Indian and international standard. Leveraging advanced tax technology and deep domain expertise, we enable businesses to remain compliant, reduce risk exposure, and unlock long-term value in a rapidly evolving international tax environment.
Understanding permanent establishment
The concept of permanent establishment (PE) has evolved significantly especially under the influence of BEPS Action Plans and the Multilateral Instrument, wherein the tax authorities now expand their definitions beyond traditional notions of physical presence. At EY, we assist clients in updating their PE analyses to reflect current international tax laws and treaty interpretations. Our team at EY, conduct detailed jurisdiction-specific assessments, identify and prioritize key PE risk areas, and provide strategic guidance to mitigate exposure.
In situations where a PE is deemed to be created, we support clients with end-to-end solutions including registration, tax compliance, profit attribution analysis, and filing obligations. Through proactive planning and expert advisory, we assist client in formulating defensible business models and operational strategies as well as manage PE risks effectively, while maintaining global compliance and operational agility.
Summary
The complexities of international tax require clients to take a proactive approach to compliance and risk management. Our dedicated team of tax professionals at EY, offers vide range of services to support MNEs in navigating the intricacies of international tax regulations. Through our tailored assessments, technology-enabled solutions, and deep technical expertise, we empower clients to enhance their international tax positions, improve operational efficiency, and ensure compliance with evolving international tax frameworks. As the global landscape continues to change, staying informed and prepared is essential for success in the realm of international tax.
GenAI was used to develop an iteration of this article. In accordance with EY editorial guidelines, the end product was reviewed and edited by EY professionals before publication.
How EY can help
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EY India's International Tax Planning services offer comprehensive international taxation solutions, global tax strategies & expert international tax services.
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Explore Global Trade Automation solutions to streamline compliance, optimize trade operations, and enhance efficiency with advanced digital strategies.
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Transform your tax functions with EY’s India Tax Platform - an AI-powered, cloud-based digital tax solution offering automation, insights, and unified dashboards.
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