Regarding 3CEB query

• Form 3CEB Mandatory? Yes, if the non-resident MD meets the criteria of an Associated Enterprise (AE) under Section 92A (e.g., through voting power, board appointment control, or executive control).

• Reason: Salary/remuneration paid to a non-resident AE constitutes an international transaction (provision of services) under Section 92B.

• If Not an AE: If the non-resident MD is purely a professional executive with no equity or control triggers under Section 92A, Form 3CEB reporting is not required, though standard TDS (Section 192/195) and Form 15CA/15CB compliances remain applicable.

Thanks Sir for your valued views.

What will be the nature of relationship as per section 92A(2) of the Act, 1961 ? In our case, the MD holds one percent equity and with relatives more than fifty percent shares. 

When will the individual non resident MD be said to be considered as AE ?

Regards

CA Dipjyoti Majumdar

A director can't be treated as an enterprise. Hence, this is not applicable.

Refer: https://bit.ly/4j42nRF

Dear Sir

Please refer definition of Enterprise in section 92F(iii). It includes a 'Person' and a person does include an individual as well.

An interesting issue would be to ascertain what TP method to be used to determine if salary paid is at arm's length. Can cost plus, resale price, TNMM methods be made relevant here for salary ?

Regards,

CA Dipjyoti Majumdar

Yes, but which provision makes him an associated enterprise?