Secondment, Service PE and FTS: Decoding the Delhi High Court’s EY USA Ruling

As global businesses increasingly rely on international mobility and cross border talent deployment, tax implications surrounding secondment and hiring arrangements have become significantly more complex. 

Recent judicial developments have reshaped the principles governing taxation of secondment reimbursements, permanent establishment exposure, withholding tax obligations, and characterization of income. 

The experts will analyse landmark judicial precedents, treaty provisions, and practical issues impacting multinational enterprises, Global Capability Centres (GCCs), consulting firms, and professional service networks, while sharing practical strategies to effectively manage evolving tax risks.

Key discussion points: 

• International Hiring of Labour – Background & Concept
• Secondment: Contract of Service vs. Contract for Service
• Landmark rulings: Morgan Stanley, Northern Operating Systems & Centrica
• Delhi High Court's EY USA judgment – Key facts & findings
• Service PE vs. FTS/FIS – Correct framework for taxing secondment arrangements
• Taxability of secondment reimbursements without markup
• Withholding tax implications under Sections 192 & 195
• Professional services – Exclusion under Article 12(5)(e) & Article 15
• Practical implications for MNCs, GCCs, consulting firms & professional service networks
• The way forward
   

Speakers

• Ravi Sawana, Partner
• Samyak Lohade, Associate Director