European EPC Contractor: India Project Office Return with PE Attribution
Situation
A European EPC contractor completed a large infrastructure project in India through a project office. Without a defensible attribution study, the tax department could reasonably have sought to attribute a much larger share of overall contract value as India profit than was actually earned there.
Approach
We assessed the project office's activities to confirm it constituted a Permanent Establishment, computed the profit attributable to India operations following applicable transfer pricing and PE attribution principles, and prepared the ITR-6 filing with the required audit report.
Outcome
The accepted computation limited attributable profit to around 18% of contract value, versus a broader unsubstantiated estimate that could have pushed it well above 35 to 40%, keeping the taxable base, and the resulting tax outflow, well controlled.
Identities are anonymized to protect client confidentiality. The situation, approach, and figures reflect an actual engagement.
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