A company has set up a branch in Saudi Arabia. It is an independent branch. The accounts are audited there and tax is paid there @ 20% according to the tax laws of Saudi Arabia. Depreciation is also charged on the foreign assets at the rates prevalent in Saudi Arabia.At the year end,the accounts of the foreign branch are merged with the accounts of Indian Company.
Now,in this regard the question arises as to whether Depn. on foreign assets is to be charged at the rates of depn. as per Income Tax of India or as per the tax laws of Saudi Arabia.
Kindly resolve the query at the earliest as it is urgent.
Thanks in advance.
CAclubindia
