CROSS BORDER SECONDMENTS -２国間出向契約の締結における税制への対応- Issues & Recent Developments for Japanese p Corporations p -論点及び近年のアップデート- ♣ presented by Sunil Arora FCA – Partner & Director, Taxation Yuta Tokumitsu CPA - Asst Manager, Compliance June 13, 2014 New Delhi today’s today s discussion 1. what is a cross-border secondment arrangement ２国間出向契約とは 2. views of the Indian tax authorities 税務当局からの視点 3 secondments by Japanese corporations 3. 日本企業のケース 4. potential risks exist 検討すべきリスク 5. how can you mitigate risk リスクへの対応方法 6 some connected issues 6. その他検討事項 7. how can we help 弊社業務について 8. summary in nihongo by Yuta Tokumitsu 日本語解説 -担当 徳光- 3 1. secondment arrangement an arrangement where an employee is temporarily assigned to work in a different office or department of their employer or for another organization. Home Company 親会社/グループ会社 （出向元） 本解説で想定する「出向」とは、日 本国側の会社における従業員が 「一定期間」インド法人において就 労する取り決めとする。 Japan India Reimbursement or cross o c oss charge c a ge Assignees Secondee 子会社/グループ会社 （出向受入会社） Host Company 4 1. meaning of secondment terms of each such arrangement can be different however there are some essential ti l items it which hi h a secondment d t arrangementt mustt address dd clearly l l ii.e. • Identity of employer (during secondment period) • Duration of secondment • management & reporting of secondee • payment of salary & benefits 出向契約締結にあたり通常含ま れるべき項目 れる き項目 1. 雇用者の特定（出向期間中） 2. 出向期間 3. 業務報告先/指揮命令系統 4. 給与その他手当の条件 identity of real employer (between Host and Home) is the most critical aspect 実質的な雇用者の特定が重要な事項となる 実質的な雇用者の特定が重要な事項となる。 in a typical secondment arrangement, there is obligation on the company to p y to another company. p y In other words,, there is no second its employees ‘service’ which is intentionally provided by Home company to Host company through secondment arrangement 契約の内容は「出向」でありサービス提供の義務等は 通常生じない 通常生じない。 5 1. meaning of secondment 実質的な雇用者の特定とは？ Question – how is real employer identified (between Home and Host)? labour regulations one who controls the other 他者を指揮している者。 income-tax regulations master servant relationship 雇用者・被雇用者の関係 who has right over the establishment economic (financial) dependence who bears the risk of work of other In deciding the real employer, tax 業務執行場所に対する権利を有する者 業務に関するリスクを負担する者 who has control and command over the h other h 指揮権及び命令権を有するもの 経済的（財務的）依存関係 authorities look at substance over form 税務当局の判断においては、形式ではなく、経済 的実質が考慮される。 Real employer is someone who is responsible, responsible and who enjoys the risk and reward of work done by the seconded employee リ リスク及びリターンを享受する者が実質的な雇用者と解される。 ク及びリタ ンを享受する者 実質的な雇用者 解される。 6 2. views of the Indian tax authorities what are the authorities saying? 想定される税務当局の主張 • that the secondee is an employee of Home company and 出向社員の実質的な雇用者は出向元の会社であり、 • such company is providing services to Host company through secondee 出向元の会社は 出向者を通じて出向先の会社 サ ビスの提供を行 ていると考えられる 出向元の会社は、出向者を通じて出向先の会社へサービスの提供を行っていると考えられる。 why are they viewing Home Company as employer? • home company has power to control deputation of secondee • it pays most of salary to secondee • it has right to dismiss the secondee 当局の主張の背景の理解 1. 出向元会社が出向者に対する指揮権を有している。 2. 給与の大部分は出向元の会社が支払っている。 3. 出向契約を修了させる権利を有している。 what are the apparent consequences? • reimbursement of salary by Host company is considered as service fee • accordingly, tax withholding on such service fee may apply at 10/20/25% • service tax, transfer pricing and other consequences 考えうる賦課 1. 立替精算がサービスフィーと認識される 2. 上記より、サービスフィーに対して源泉税が課される。 3. 同様に、移転価格税制の検討対象になる。 7 2. views of the Indian tax authorities what defense does tax-payer generally provide? • Host company is the employer since it has significant rights on secondee i.e. to accept/refuse his secondment; controlling his work and; taking risk and reward of his work performed • Intention between parties should be respected i.e. contract is for secondment and not service • Payment of salary by Home company is only a funding arrangement which is agreed between parties and does not change the employment status 企業側の主張 1. 出向先企業が業務に対する権限の殆どを有している。 2 出向に関する企業間の合意に関する意図が加味されるべき。 2. 出向に関する企業間の合意に関する意図が加味されるべき 3. 出向元による資金負担は資金配分に関する合意の結果にすぎない。 8 2. views of the Indian tax authorities Centrica India Offshore (P) Ltd – Delhi High Court Ruling (WPC 6807/2012) BRIEF FACTS UK Parent Service agreement between SCo & FCo wherein SCo renders vendor management services affiliate FCo deputed its employees to SCo. Secondment agreement signed. P Purpose off secondment d was to meet the h objectives bj i under d service i agreement Group Cos (FCo) Assignees continued to participate in FCo’s retirement & social security plans Overseas India Payment Outsource of back office work subsidiaryy SCo had right to terminate secondment employment agreement with FCo agreement, not the Seconded employees worked at SCo premises under its instructions. Salary cost of assignees borne by SCo, though entirely paid by FCo Assignees AAR RULING (STAGE 1) SCo Vendors Local interface, Quality check Assignees remain employees of FCo during secondment period Work performed by assignees is for the FCo, not for SCo Assignees worked on behalf of FCo. Hence, FCo is the real employer * AAR ‐ Authority for Advance Ruling 9 2. views of the Indian tax authorities Centrica India Offshore (P) Ltd – Delhi High Court Ruling (WPC 6807/2012) HIGH COURT RULING (STAGE 2) UK Parent Agreed with AAR ruling affiliate Employer-employee relationship exists with FCo, not with SCo because Group Cos (FCo) • SCo not legally obliged to pay employment cost to assignees i.e. no legal recourse over assignees by SCo Overseas India • Right to termination of employment is not with SCo payment outsource of back office work subsidiaryy assignees SCo Vendors local interface, Quality check • Assignees never effectively released from FCo’s employment; return is automatic after completion of secondment period S Stay off assignees in India d triggers S Service PE ffor FCo. C Reimbursement b of salary taxed as business profits in hands of Fco. 出向がサービスと認定された判例 Held as employee of Home Company since - job overlapping under secondment & service arrangement and operational not legal control - SCo possessed operational, 10 2. views of the Indian tax authorities Temasek Holdings Advisors India Pvt. Ltd – Mumbai Tribunal (160 TTJ 598) BRIEF FACTS FCo deputed employees to THA. Secondment agreement signed FCo. Assignees responsible to work for Indian operations Both FCo & THA has the right to terminate the employment of secondees payment Secondees remained on the payroll of FCo. THA reimbursed the cost of salary paid by Fco Singapore TRIBUNAL RULING INDIA No requirement to register secondment arrangement under any law THA is the real employer employer. Secondees worked under the control & supervision of and for the business of THA. assignee THA Taxes were withheld while paying salaries to secondees. No double deduction at the time of salary payment and again on reimbursement Held as employee of Host Company since -secondees worked for THA only 現地法人が実質的な雇用 者とされた判例 - no double taxation on salary paid to secondees & reimbursement to FCo 11 2. views of the Indian tax authorities AT & S India (P) Ltd - AAR Ruling (287 ITR 421) BRIEF FACTS Technical service agreement between FCo & ATS FCo. FCo deputed its employees to ATS. Secondment agreement signed. Assignees to work under direct control off ATS. FCo retains right to replace/remove the assignees payment USA AAR RULING Purpose of secondment is to execute technical service agreement INDIA Salary is fixed by FCo, not by ATS. Real employer is FCo, not ATS assignee No back-up evidence to justify that payment is a reimbursement & that no mark-up is charged ATS Payment taxed as FTS 出向がサービス提供とされた判例 Held as employee of Home Company since - job overlapping under secondment & service arrangement and - Weak documentation on nature of reimbursement 12 2. views of the Indian tax authorities Abbey Business Services (P) Ltd – Bangalore Tribunal Ruling (53 SOT 401) BRIEF FACTS FCo deputed its employees to ABS. Secondment agreement signed. FCo. Assignees to work under direct control of ABS. Where ABS terminates the secondment, FCo to mandatorily withdraw the assignee from India payment USA FCo was not responsible for any loss or damage by assignee’s work ABS retains right to replace/remove the assignees INDIA TRIBUNAL RULING assignee Real employer is ABS i.e. vest with all rights of the employer ABS Per terms of agreement, economic interest, supervision, control, direction, manner, place, method of work, accept or reject of assginee exercised by ABS only Held as employee of Host Company since - Differentiates between legal and economic employer - employment effectively transferred to ABS 現地法人が実質的な雇 用者とされた判例 13 2. views of the Indian tax authorities Summary of key court rulings Name of Ruling Court/Year Centrica India Off h Offshore (P) Ltd Temasek Holdings Advisors India Pvt. Pvt Ltd 個別のケースにより、判断が別れ、傾向、 州毎の方針は明確ではない。 Key Findings Real Employer? /実質的な雇用者 Delhi HC/2014 • overlapping between secondment and service i agreementt • SCo has operational and not legal control Home company 出向元企業 Mumbai Tribunal/ 2013 • secondees worked for THA only Host company 出向先企業 • no double taxation on salary paid to secondees & reimbursement to FCo AT & S India (P) Ltd AAR/2006 • jjob overlapping pp g under secondment & service arrangement and Home company 出向 企業 出向元企業 • Weak documentation on nature of reimbursement Abbey Business Services (P) Ltd Bangalore Tribunal/ 2012 • Provides distinction between legal (Home) and economic employer (Host) • employment effectively transferred to ABS Host company 出向先企業 14 3. secondments by Japanese corporations deputation to India YT, a Japanese National, is employee of JCo J Co YTは日本国籍を持つ者であり、J社の被雇用者である。 gets deputed p to ICo,, a subsidiary/JV y/ of JCo YT g YTはI社（J社の子会社又はJV会社）へ出向を命じられた。 Working in India, YT reports to either or both of ICo or JCo Japan YTはインド共和国内で就労しJ社及びI社の両方へ業務報告を行う。 India Assignees YT Reimb or cross charge 立替精算 （生じる場合、 生じない場合が 考えられる ） 考えられる。） YT receives minimum salary from ICo (say $2,000/month) YTはI社からは、インドでの就労規制上の最低限の給与を受け取り、 & benefits. Balance salary in Japan その他手当について日本（J社）より受け取る。 そ 他 本（ 社） り受 。 ICo reimburses salary cost of YT to JCo (may be) I社はJ社払い給与の内一部をJ社へ立替精算（支払い）する場合がある。 I Co On completion of deputation, deputation YT goes back to JCo. JCo YTs YTは出向期間の終了と共に、J社での業務へ自動的に戻される。 Employment with ICo terminates automatically また、同時にI社との雇用契約も自動的に終了する。 15 3. secondments by Japanese corporations documentation generated upon deputation Letter of deputation – stating the details of new J Co 出向辞令 posting Employment arrangement with ICo – standard 雇用契約書 terms and conditions. Generally drafted to meet Japan India Reimb or cross charge Assignees YT visa i and d FRRO regulations l ti Secondment Agreement between JCo and ICo J社及びI社間における出向契約書 – stating t ti terms t off deputation. d t ti Often Oft found f d to t be b loosely worded I Co 日本企業の出向における取り扱いは 日本企業の出向における取り扱いは？ Question – who is the real employer, JCo or ICo? 16 3. secondments by Japanese corporations Question – What is YTs relationship with JCo and ICo? relationship with JCo relationship with ICo recruits employee; p y ;p principal p employer p y accepts p deputation, p , secondary y employer p y 被雇用者を採用している、また従来の雇用者である。 pays most salary (may be), even during deputation 給与負担割合 governs YTs deputation 出向契約そのものの指揮/管理を行っている。 出向の受入を行う、J社と平行して法律上の雇用者である。 bears risks and rewards of YT’s work in India リスクとリタ ンの享受 リスクとリターンの享受 pays Indian social security (mandatory) 法定の社会保険料を負担している。 automatic restoration of employment post pays Indian salary, benefits & tax (may be) インドにおける給付及び税金を支払っている。 ド 給 び税金を支払 deputation 出向契約終了時には、自動的に日本業務へ戻る。 seeks timely reporting from YT YTはJ社への報告が原則として義務付けられる。 has power to terminate employment 雇用に対する解除権 has power to refuse acceptance of employee 出向者受入への拒否権を有する。 has power to terminate deputation 雇用に対する解除権 17 3. secondments by Japanese corporations Question – What are the critical factors to identify real employer of YT? key factors subsidiary factors monitoring g of p performance who will approve pp holidays, y , vacations 休暇の承認権限 業務成果を監督する者 who receives operational reporting 業務に関する報告を受ける者 who is responsible for training 研修に関する責任の有無 can the ICo control or recommend termination of employment I社における雇用解除の権限又は要求権限 can ICo reject any secondee? I社における出向受入の拒否権 who will reimburse expenses 経費の精算を行う者 who pays salaries, benefits, sick leave 給与、手当等の支払者 which entity does he represents to third parties 第 者 第三者に対する表見の対象 す 表 象 who is responsible for loss caused due to employee 被雇用者の業務による損失の負担者 Conclusion - A collective understanding of these factors will decide the real employer 複数の観点から総合して、判断される。 18 4. potential risks exist 想定されるリスク JCo may establish a PE in India through seconded employee • As per Centrica ruling, a service PE can be established through overseas company employee in India. However, Indo-Japan tax treaty does not envisage a service PE situation (No Risk) • On the other hand, a fixed place PE may be possible (High Risk) 出向契約がPEを提起する可能性 →PEに帰属する課税所得が計算され、課税が行われる →PEに帰属する課税所得が計算され 課税が行われる 可能性がある。 salary y reimbursement can be treated as income of JCo • Critical issue as stated in Centrica ruling (High Risk) • Tax withholding (WHT) at 10/20/25% may apply Si ifi t interest i t t and d penalty lt costt on ICo IC if no WHT done. d T officer ffi h power to t • Significant Tax has initiate prosecution also 立替精算が収益とみなされる可能性 →収益取引とみなされた場合には源泉税等の課税が行われる 可能性がある。 可能性がある 19 4. potential risks exist service Tax is not applicable • Service tax authorities in India stated that secondment results into rendering of ‘manpower recruitment agency services’ by overseas company time now decided in favour of tax tax-payers payers (see • Matter was in dispute for a long time, Volkswagen India Pvt Ltd v CCE (2013-TIOL-1640-CESTAT-MUM) 出向契約そのものに対しサービス税が課される可能性は低い。 Japan tax authorities may disallow salaries paid by JCo • Where JCo does not get reimbursed by ICo, it runs the risk of expenditure disallowance in Japan i.e. salary paid by JCo to international staff, during secondment to India, may not fully be allowed as deductible expenditure in Japan 日本での損金算入可能性 →法人税基本通達９－２－４７：出向者に対する給与の較差補てん →インド側での課税関係と同時に、日本側での出向者給与の損金算入可能性についても 検討する必要あり。 20 4. potential risks exist 税務当局の補足ルート 税務当局の補足ル ト how can tax officer know about such transaction? • Tax officer receives information when your accountant makes online reporting of ‘no tax deduction’ while making reimbursements to JCo (High Risk) • Information is collected by tax officer from your bankers • Information is collected by tax officer through routine tax investigations of JCo, ICo or any individual secondee 税務当局により、質問が提起される情報ソースは主に以下の３つ 1. 外国送金時に作成される勅許会計士による証明書の閲覧 2. 銀行取引記録 3. 個人所得税申告書の内容 21 5. how can you mitigate risk Ensure that the following agreements are on record 適切な文書化が最も大切 Secondment agreement between JCo and ICo • Intent must m st be clearly clea l stated • All rights and liabilities of employment should get transferred to ICo, who should 出向契約書 • 出向契約書では出向契約の目的を明確化する。 契 契 • 雇用に関する責任及び権限の範囲を明確化する。 Voluntary arrangement, not obligatory • 出向契約は２社間におけるビジネス上の契約であることを明確化 する。 accept the same expressly • Employment agreement between Secondee and ICo • General terms and conditions at par with local employees • Right to supervise, receives instructions with ICo • ICo gets right to termination • ICo is responsible for risk and reward for service of secondee 雇用契約書 • インドでの雇用契約に必要な要素が織り込まれている。 インドでの雇用契約に必要な要素が織り込まれている • I社による業務の指導監督権が示されている。 • I社による出向契約の終了権限が示されている。 • I社が出向者の業務の結果に対するリスクとリターンを享受することが示されている。 22 5. how can you mitigate risk Maintain robust documentation • Sign all agreements as advised in the previous slide 強力な証拠となる書面の整備 • 適切な署名/承認が行われている。 • 出向赴任時依然に適切な書類が準備されている。 • 関連書類と実際の業務実態に齟齬がない。 • All documents should be in place prior to arrival of secondee instances For instance instance, report of work • Documentation should be backed by actual instances. performed, approvals, debit notes for expenditre incurred etc Intent I t t off secondment d t arrangementt mustt be b clearly l l stated t t d • JCo should not be obliged to provide employees on secondment • Similarly, ICo should not be obliged to accept them • Give free hands to both 出向契約に対する両者の意図を明確化する。 出向契約に対する両者の意図を明確化する →あくまでも、２企業間におけるビジネス上の取引 である点を明確にする。 Leave no ambiguity on status of ‘real real employer’ employer • As far as possible, address key issue of identifying ‘real employer’ at the very beginning. Do not leave to interpretation at later stage 実際の雇用者に関する文書化はできる だけ早い段階で実施する。 →事後的/表面的な文書化では当局対応 に耐えうるものとできない。 23 5. how can you mitigate risk Avoid linkage between secondment & technical service arrangement 役務提供契約との関連性の排除 →出向契約の一部がサービス提供契約と重複する実態があるとみな されるリスクを回避するため、役務提供契約との区別を明確にする。 • Secondment not to take place as a result of technical agreement • No overlapping between these two arrangements. Avoid confusion ICo can decide to bear the entire cost of employment • This is an ideal situation and will help is establishing that ICo is ‘real employer’ • However, this is not mandatory since some courts have stated that funding arrangement has no bearing on status of ‘real employment’ 24 6. some connected issues その他の検討事項 そ 他 検討事項 Any impact on individual taxation of seconded employees • No; since tax is generally paid on total salary これまでの検討は法人税課税に関するものであり、 駐在員自身の個人所得税に関するものではない。 個人所得税についてはいずれのケースでも全ての 所得を適切に申告していれば影響はない。 Different states/courts may take different position • This is evident in the summary of decided cases we presented earlier • However, However since the issue is still evolving, evolving it is important to strengthen fundamentally 判例は参考として検討できるが、現在ケースにより判決が異なることから、あくまでも参考とし、 個別のケースでの実態の検討が重要である。同様に州政府ごとの判断もケース毎に異なること が予想されるため、最新の判例のみを見て判断しない。 Maintain consistency in preparation and submission of documentation 事後的な税務当局対応ではなく、出向契約の計画時点から、各関連文書の準備と提出 における書面の整合性、各当局への書面の整合性を図ることが必要。 →事後的な対応として形式のみ整えた文書を作成することでは、不十分。 • As suggested earlier, earlier decide all critical issues and sign all agreements in advance • Maintain consistency in submitting to visa, FRRO or income tax or any other authorities. This will contain the risk of ICo 25 7. how can we help 弊社業務について As your business partners, our teams understand your operations and the issues which Japanese companies face in India Our teams in Delhi, including members of the Japan desk, are qualified to evaluate your business arrangements, g , highlight g g specific p areas of concern and offer customized solutions In the given case, our teams can assist in • understanding your current set-up • review or prepare existing employment and secondment arrangements • Assist in maintaining documentation for reporting purposes 弊社では 本件出向契約の税務リスクへのアドバイザリーとして以下の業務を提供しております 弊社では、本件出向契約の税務リスクへのアドバイザリ として以下の業務を提供しております。 1. 2. 3 3. 4. 5. 計画スキームのリスク分析 各種文書のドラフト作成（出向契約、雇用契約、出向辞令等） お客様作成の文書のレビュー お客様作成の文書のレビュ 日々のオペレーションにおける税制上の留意点 その他関連論点へのアドバイス 業務の必要性 ご予算等に関しまして お気軽にお問い合わせを頂けましたら幸いです 業務の必要性、ご予算等に関しまして、お気軽にお問い合わせを頂けましたら幸いです。 26 we welcome y your questions/feedback q / [email protected] il @ i [email protected] 27
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