Скачать или смотреть How the Wealthy Save Taxes | Business | Sarthak Ahuja

Here’s the biggest Tax Hack that most wealthy use...

They set up a company in the UAE in any of the freezones...

Now, imagine they have a business where payments are received from foreign customers, through exports or digital nature of their business...

They start invoicing from the UAE entity and receive money in the UAE bank account...

In the UAE, a 9% corporate tax is applicable only if the profits are above AED 375k, which is almost equal to Rs 90 lakhs...

However, only those companies are subject to tax that have a revenue of above AED 3 Mn i.e. Rs 7 crores!

And that’s where they play...

But, if you live in India... the Indian government wants to tax your profits in India...

So to go around this, they essentially try to show that the “Place of Effective Management” or POEM of the business is outside of India (i.e. UAE)

For this, there are 3 steps to make their case airtight...

1/ Hire an employee in the UAE and pay him a measly salary to show someone fully employed

2/ Get a small place on rent that is shown as the physical office

3/ Land in the UAE 4 times a year to show physical presence for a Board Meeting, where business decisions were taken (outside of India)

Is this lawful?

If someone abides by the legal requirements of having a POEM outside of India with a dedicated place and employee outside the country too... then yes, it is legal.

However, if the Indian tax department finds out... they definitely scrutinize your case to find a way to prove that this is a sham to avoid paying taxes.

I wouldn’t recommend you do this if you live in India. In my eyes, it would neither be ethical nor lawful.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.

Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.