ICAI Releases Sixth Edition (2025) of “Technical Guide on Expatriate Taxation” to Address Cross‑Border Employee Mobility Challenges

The Institute of Chartered Accountants of India (ICAI) has released the Sixth Edition of its “Technical Guide on Expatriates Taxation” in December 2025. This latest update is designed to help the members to remain well-informed and professionally equipped to deal with the evolving tax challenges arising from cross-border employee mobility.

In today’s globalised business environment, moving talent across countries has become a key objective for organisations worldwide. Both multinational corporations and Indian enterprises are increasingly sending their employees across jurisdictions to meet shifting business goals and operational needs.

The dynamic mobility of expatriate employees, both inbound and outbound, continues to raise complicated tax issues under Indian law and international tax treaties. For tax professionals, staying up to date with these developments is essential to ensure compliance and deliver informed advice in an increasingly borderless world.

This updated edition comprehensively incorporates recent legislative amendments, including changes in the taxability of capital gains, revised tax slab rates as per the concessional tax regime, which has now become the default and other significant provisions of the Income-tax Act.

Key Highlights of the Sixth Edition

Residential Status and Global Income

• Expanded thresholds for physical presence and deemed residency provisions now determine whether Indian citizens or Persons of Indian Origin are taxable on global income.
• The guide explains how residency under domestic law interacts with treaty‑based residency rules, offering clarity on tie‑breaker tests and DTAA relief.

Salary Structures and Withholding Obligations

• Detailed analysis of expatriate salary components, allowances, reimbursements, and perquisites, under the default tax regime.

Inbound Assignments

• Business visits, short‑term assignments, secondments, and permanent relocations are examined with respect to taxability, Permanent Establishment (PE) exposure, and short‑stay exemptions.
• The guide emphasises documentary substantiation to mitigate PE risk for foreign entities.

Outbound Assignments

• Indian employees deputed abroad remain subject to Indian tax depending on residency status, with potential PE implications for Indian entities in host jurisdictions.
• The publication outlines treaty‑based relief and compliance requirements for outbound expatriates.

Social Security Contributions

• Mandatory provident fund contributions under the Employees’ Provident Funds apply to foreign passport holders working in India.
• Withdrawal rules differ depending on whether India has a Social Security Agreement (SSA) with the expatriate’s home country.
• The guide also covers employer obligations, contribution rates, and treaty‑based exemptions.

Exchange Control and Black Money Act Compliance

• Regulations under FEMA permit salary remittance abroad, subject to compliance with Indian tax laws. New procedural requirements, such as electronic filing of Form 10F for DTAA relief, are explained.
• Obligations under the Black Money Act, including disclosure of foreign assets and income, are integrated into the compliance framework.

It serves not only as a tax guide but also as a broader regulatory reference for structuring, documenting, and implementing compliant expatriate arrangements.

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