ITAT Delhi Judgement Toshiba Secondment Case

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Source: ITAT Delhi Judgement Toshiba Secondment Case

The ITAT Delhi, in the Toshiba Secondment case, clarified that reimbursement of expatriate employees’ salaries by an Indian company to its foreign parent is not Fees for Technical Services (FTS) when made on a pure cost-to-cost basis. Since there is no income or profit element and the secondees work under the control and supervision of the Indian entity, such payments cannot be taxed as FTS or attract withholding tax under Section 195.