Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Mode of payment for invoice payment from foreign entity

476 views

Save Share

Balaji

Other

21 Points Posted on 20 June 2021

Hi. My company is in Belgium. We don't have a branch in India. We are planning to hire some associates as contract staffing through a consultancy in India. In which currency the monthly invoice payment need to be made ? In INR or EUR ?. Will there be any tax implications for the Belgian company in India if they pay in INR ? Can they do wire transfer or Do they want to open any account in India to do this transaction ?

Replies (2)

Quick Summary

This discussion explores the best currency and methods for a Belgian company to pay invoices for contract staffing sourced through an Indian consultancy. Key questions include whether payments should be in INR or EUR, potential tax implications for the Belgian company in India, and the necessity of opening an Indian bank account. Options like wire transfers and specific foreign exchange accounts are considered, with advice suggesting payments in EUR that are then converted to INR by staff in India.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 20 June 2021

Payment should be made in EUR by foreign company and that should be exchanged in INR by the staffs in India through respective SBI branch of foreign exchange.

A special account should be open for foreign transfer or wire transfer may also be applicable.

No there will be no tax implications on Belgium company as it is an foreign company situated outside India