Uk based company - hiring contractor in india

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IT COMPANY IN UK (Querist)

14 January 2016 We are a UK based IT company and are looking into outsourcing specific tasks to a contractor based in Bangalore, India - we require clarification on how payment would be made to contractor - for example, the tax, filing and reporting procedures / arrangements etc. Essentially, what are the steps involved in paying a contractor?

Guest

Guest (Expert)

14 January 2016 In case the UK based company does not have any permanent establishment in India - like a project office / liason office etc and if the payment is made directly from overseas office, there are no procedures. Responsibility of taxation, filing, etc are that of the Indian contractor.

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IT COMPANY IN UK

IT COMPANY IN UK (Querist)

14 January 2016 Many thanks Karthikeyan - Just another query - if we wanted to make the contractor a permanent employee how would be go about doing that? and how would the salary be paid? Please note that we do not have a permanent establishment in India at the moment.

IT COMPANY IN UK

IT COMPANY IN UK (Querist)

Guest

Guest (Expert)

15 January 2016 His salary can be paid from your bank account iin UK. Is the contractor turned employee going to reside in India?

IT COMPANY IN UK

IT COMPANY IN UK (Querist)

15 January 2016 Yes the contractor turned employee will reside in Bangalore, India.

Guest

Guest (Expert)

15 January 2016 In that case, as far as Income Tax is concerned, UK company should deduct tax after getting declarations from the employee and remit the same to government and file relevant forms. There are no other requirements in this regard. However, I am not sure of the Labour regulations - for which you may rely on other professionals.

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