Legal Requirement in a Host Country
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Thailand officially the Kingdom of Thailand formerly known as Siam is a country located at the centre of the Indochina peninsula in Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west by the Andaman Sea and the southern extremity of Burma. Its maritime boundaries include Vietnam in the Gulf of Thailand to the southeast, and Indonesia and India in the Andaman Sea to the southwest.
* TAXATION IN THE THAILAND
all taxes imposed on total income or on elements of income including taxes on gains from the alienation of movable or immovable property, taxes on the total amount of wages or salaries paid by enterprises
Personal income tax
An individual is regarded as a tax resident if he/she resides in Thailand at one or more time for an aggregate period of 180 days or more in any tax year.Corporate income taxCorporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership carrying on business in Thailand or not carrying on business in Thailand but deriving certain types of income from Thailand.| | |
Value added tax
Value Added Tax (VAT) is an indirect tax imposed on the consumption of goods and services. VAT is imposed on the value added of each stage of production and distribution of goods or services.
Specific business tax
Specific Business Tax (SBT) is another kind of indirect tax introduced in 1992 to replace Business Tax. Certain businesses that are excluded from VAT will instead be subject to SBT.
Petroleum income tax
Petroleum Income Tax (PT) is a direct tax, levied annually (for each accounting period of 12 months duration) on net profit of a “petroleum taxpayer”, who is carrying out the business of petroleum exploration and production. It is also levied on the disposal of profits outside of Thailand. The rules and regulations for Petroleum Income Tax are covered under Petroleum Income Tax Act and other related law. The rates, penalties, surcharge, etc. are different from that of Corporate Income tax. An accounting period is normally 12 months. The Director General may grant permission for more or less than 12 months, if appropriately justified. The first accounting period shall begin on the day that the company makes its first sale or disposal of petroleum subject to royalty. This day is considered as the beginning date of the accounting period. An accounting period may be shorter than 12 months for the following case: | a)| if the company takes any day as the closing date of the first accounting period:| | b)| if the company ceases its petroleum business, the date of dissolution shall be the closing date of the accounting period:| | c)| if the company changes the closing date of an accounting period with the approval of the Director-General.| In the case the company transfers any rights under a concession prior to the beginning date of the first accounting period, this date of transfer shall be treated as the beginning and closing date of the accounting period.
Stamp duties are taxed on instruments and not on transactions or persons. For the purposes of stamp duty, an instrument is defined as any document chargeable with duty under the Revenue Code. The stamp duty rules are contained in Chapter VI of Title II of the Revenue Code.
Customs duty is levied on imported goods and is usually calculated as a percentage on the value of the goods (set in the schedules to the Customs and Excise Act). However meat, fish, tea, certain textile products and certain firearms attract rates of duty calculated either as a percentage of the value or as cents per unit (for example, per kilogram or metre).
Exercise tax is imposed on the sale of a selected range of commodities whether manufactured locally or imported. Tax rates are based on a specific rate whichever is higher. Tax liabilities arise on locally manufactured goods when leaving the factory and at the time of importation for imported goods.
* ENTRY REQUIREMENT
Generally, a foreign citizen who wishes to enter the Kingdom of Thailand is required to obtain a visa from a Royal Thai Embassy or a Royal Thai Consulate-General. However, nationals of certain countries do not require a visa if they meet visa exemption requirements as follows: (1) They are nationals of countries which are exempted from visa requirements when entering Thailand for tourism purposes. Such nationals will be permitted to stay in the Kingdom for a period of not exceeding 30 days. (2)
(2) They are nationals of countries which hold bilateral agreements with Thailand on the exemption of visa requirements. Passport holders from 40 countries and 1 special administrative region – Hong Kong SAR – are not required to obtain a visa when entering Thailand for tourism purposes and will be permitted to stay in the Kingdom for a period of not exceeding 30 days on each visit. Foreigners who enter the Kingdom under the Tourist Visa Exemption category may re-enter and stay in Thailand for a cumulative duration of stay of not exceeding 90 days within any 6-month period from the date of first entry. – Please note that Tourist Visa Exemption does not apply to foreigners holding Travel Document for Aliens issued by these 40 countries.
– Foreigners entering Thailand under the Tourist Visa Exemption category must possess adequate finances for the duration of stay in Thailand (i.e., cash 10,000 Baht per person and 20,000 Baht per family). Countries not required to obtain a visa when entering Thailand for tourism purposes: Australia, Austria, Belgium, Brazil*, Bahrain, Brunei Darussalam, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Republic of Korea*, Kuwait, Luxembourg, Malaysia, Monaco, Netherlands, New Zealand, Norway, Oman, Peru*, Philippines, Portugal, Qatar, Singapore, Spain, South Africa, Sweden, Switzerland, Turkey, United Arab Emirates, United Kingdom, United States of America, Vietnam * Thailand holds bilateral agreements on visa exemption for holders of diplomatic, official and ordinary passports for a visit of not exceeding 90 days with Brazil, the Republic of Korea and Peru.
Therefore, nationals of these 3 countries are exempted from visa requirements and are permitted to enter and stay in Thailand for a period of not exceeding 90 days. Countries which have concluded agreements on the exemption of visa requirements for holders of diplomatic or official or service/special passports with Thailand and permitted to stay for a period of not exceeding 30 and 90 days : 30 days: Cambodia, China, Hong Kong SAR, Laos, Macau SAR, Mongolia, Myanmar, Oman, Vietnam 90 days: Argentina, Austria, Belgium, Bhutan, Brazil, Chile, Costa Rica, Croatia, Czech Republic, Germany, Hungary, India, Israel, Italy, Japan, Republic of Korea, Luxembourg, Malaysia, Mexico , The Netherlands, Nepal, Panama, Peru, The Philippines, Poland, Romania, Russian Federation, Singapore, Slovak Republic, South Africa, Switzerland (including Liechtenstein), Tunisia, Turkey , Ukraine, Uruguay (effective 16 October 2008). Countries which have concluded agreements on the exemption of visa requirements for holders of ordinary passports with Thailand and permitted to stay for a period of not exceeding 30 and 90 days: 30 days: Hong Kong SAR*, Laos, Macau SAR*, Mongolia, Russia, Vietnam * According to the Agreements on Exemption of Visa Requirements between Thailand and Hong Kong SAR and between Thailand and Macau SAR, all types of Thai passports including diplomatic and official passports shall be exempted from visa requirements for a visit of not exceeding 30 days to Hong Kong SAR and Macau SAR. 90 days: Argentina, Brazil, Chile, Republic of Korea, Peru.
What documents will be required?
– Passport or travel document with validity not less than 6 months – Visa
application form completely filled out
– Recent( 4 x 6 cm.) photograph of the applicant
– Evidence of travel from Thailand (confirmed air ticket paid in full) – Evidence of adequate finance (20,000 Baht per person and 40,000 Baht per family) – Visa of a third country in a passport or travel document – Letter of invitation stating the application’s participation in sports activities in the Kingdom – Consular officers reserve the rights to request additional documents as deemed necessary Tourist Visa:
– Passport or travel document with validity not less than 6 months – Visa application form completely filled out
– Recent( 4 x 6 cm.) photograph of the applicant
– Evidence of travel from Thailand (air ticket paid in full) – Evidence of adequate finance (10,000 Baht per person and 20,000 Baht per family) – Consular officers reserve the rights to request additional documents as deemed necessary Non Immigrant Visa:
– Visa application form completely filled out
– Passport or travel document with validity not less than 6 months. The validity of 18 months is required for one year visa application. – (4 x 6 cm) photograph of the applicant, taken within the past six months – Evidence of adequate finance ( 20,000 Baht per person and 40,000 Baht per family ) – Birth Certificate (“O”)
– Certificate of Marriage or its equivalents (“O”)
– Transcript / Letter of acceptance from the concerned schools/universities or institutes (“ED”) – Letter from Thailand’s Board of Investment. (“IB”) – Official Note certifying the purpose of travel from the Government Agencies /Embassies and Consulates / International Organizations / State Enterprises in Thailand. (“F” / “B” / “ED” / “M” / “R”) – Letter of approval from the Ministry of Labor (To obtain this letter, the prospective employer in Thailand is required to submit Form WP3 at the Office of Foreign Workers Administration, Department of Employment, Ministry of Labor. – Letter from a company stating the objective of the visit to Thailand (“B”) – Document showing correspondence with trading partners in Thailand. (“B”) – Letter of invitation from companies qualified to employ foreigners. (“B”)
– Employment contract indicating rationale for employing the applicant as well as his/her salary, position and qualifications (document must be signed by authorized managing director and affixed the seal of the company) (“B”) – Copy of Work Permit issued by the Ministry of Labor (only in case the applicant has previously worked in the Kingdom) (“B”) – Copy of corporate documents; namely 1) list of shareholders 2) business registration and business license 3) company profile 4) details of business operation 5) list of foreign workers stating names, nationalities and positions 6) map indicating the location of the company 7) Balance sheet, statement of Income Tax and Business Tax (Por Ngor Dor 50 and Por Ngor Dor 30) of the latest year 8) Alien income tax return (Por Ngor Dor 91) and 9) Value-added tax registration (Por Ngor Dor 20) , etc.(“B”) – Copy of educational records of the applicant and letters of recommendation from the prior employers, identifying job description and length of service time. (“B”) – Document indicating the number of foreign tourists (for tourism business only) ,or document indicating export transactions issued by banks (for export business only)(“B”)
Malaysia is a federal constitutional monarchy in Southeast Asia. It consists of thirteen states and three federal territories and has a total landmass of 329,847 square kilometers (127,350 sq mi) separated by the South China Sea into two similarly sized regions, Peninsular Malaysia and Malaysian Borneo. * TAXATION IN THE MALAYSIA
Income of any person including a company, accruing in or derived from Malaysia or received in Malaysia from outside Malaysia is subject to income tax. However, income received in Malaysia by any person other than a resident company carrying on business of banking, insurance or sea or air transport for a year of assessment derived from sources outside Malaysia is exempted from tax. To modernize and streamline the tax administration system, the self-assessment system was implemented for companies, sole proprietor, partnerships, cooperatives and salaried groups and the assessment of income tax is based on a current year basis.
Income tax refers to an amount of tax that an individual or company is obligatory to fulfill according to their annual income. The amount is determined according to government’s graduated scale. Malaysian government imposes various kind of tax that can be divided into income tax, gift tax, property tax, corporate tax, estate tax and many more. Income tax is imposed based on territorial basis
Personal income tax
All individuals are liable to tax on income accrued in and derived from Malaysia or received in Malaysia from outside Malaysia. Income remitted to Malaysia by a resident individual is exempted from tax. A non-resident individual will be taxed only on income earned in Malaysia. The rate of tax depends on the individual’s resident status, which is determined by the duration of his stay in the country as stipulated under Section 7 of the Income Tax Act 1967. Generally, an individual who is in Malaysia for at least 182 days in a calendar year is regarded as a tax resident.
Income from exercising an employment in Malaysia is regarded as sourced in Malaysia. All income attributable to the employment exercised in Malaysia is subject to Malaysian tax irrespective of where the remuneration is paid. Where an employee is required to perform his duties outside Malaysia, the entire remuneration is still chargeable to Malaysian tax as the services rendered outside. Malaysia are regarded as incidental to the Malaysian employment.
Corporate income tax
A levy placed on the profit of a firm, with different rates used for different levels of profits. Corporate taxes are taxes against profits
earned by businesses during a given taxable period; they are generally applied to companies’ operating earnings, after expenses such as COGS, SG&A and depreciation have been deducted from revenues.
Reduction in the amount of corporation tax payable, offered as an incentive for investment in large-scale projects (that increase a country’s production capacity and stock of capital). A certain percentage of the capital asset’s cost is allowed as capital allowance during the accounting period in which it was purchased. This amount is greater than the depreciation charge on the asset during that period.
A person or company carrying on an agriculture activity can claim capital allowances and special industrial building allowances under the Income Tax Act 1967 for certain capital expenditure. Capital expenditure which qualifies include expenditure incurred on clearing and preparation of land, planting of crops, provision of plant and machinery, and construction of access roads.
Deduction, exclusion, or exemption from a tax liability, offered as an enticement to engage in a specified activity (such as investment in capital goods) for a certain period. A tax benefit offered in order to encourage or discourage targeted activities. For example, the federal government offered tax credits for buying hybrid (electric/gas) vehicles and tax incentives for rehabilitating historic buildings.
* ENTRY REQUIREMENT
A visa is an endorsement in a passport or other recognized travel document of foreigner indicating that the holder has applied for permission to enter Malaysia and that permission has been granted. Indian nationals who require a Visa to enter Malaysia must apply and obtain a Visa in advance at any Malaysian High Commission, Malaysian Embassies or Malaysian Consulate abroad. In India, visa is issued at the Malaysian mission in New Delhi, Chennai and Mumbai. Visa which has been granted is not absolute guarantee that the holder will be allowed to enter Malaysia. The final decision lies with the Immigration Officer at the entry point.
VALID RETURN TRAVEL TICKET AND SUFFICIENT FUNDS
A visitor is also required to proof his financial ability to stay in Malaysia and have a confirmed ticket to a third country. Any person classified under Section 8 of Malaysian Immigration Act 1959/63(prohibited immigrants) will not be allowed to enter Malaysia even though he/she is in possession of a valid Passport or Travel Document, Visa, travel ticket and sufficient funds.
A visitor is required to complete the Arrival/Departure Card (Imm.26) upon arrival at the gazette entry points. This card is obtainable at any entry point, Malaysian Representative Office abroad or travel agencies.
A visitor must present his/her passport together with the duly completed arrival/departure card to the Immigration officer on duty and he/she must ensure that the passport or travel document is endorsed with the appropriate pass before leaving the immigration counter.
Other than application for entry for the purpose of tourist, social or business visits, all applications for other types of passes mentioned must be made before arrival in the country.
All applications must have sponsorship in Malaysia. The sponsors must agree to be responsible for the maintenance and repatriation of the visitors from Malaysia if it Should become necessary.
Types of Visa
The Malaysian Government issues Three (3) types of visa to foreign nationals:
SINGLE ENTRY VISA
Issued to foreign nationals who require a visa to enter Malaysia mainly for a social visit. Normally valid for a single entry and for a period of three (3) months from the date of issue.
MULTIPLE ENTRY VISA
1. Issued to foreign nationals who require a visa to enter Malaysia mainly 2. for business or government-to-government matters. Normally valid for a 3. Period within three (3) months to twelve (12) months from the date of issue. 4. Citizens of India who wish to enter Malaysia for the purpose of Social 5. Visit is eligible to apply for Multiple Entry Visa.
6. The validity of the Multiple Entry Visa is one (1) year. Each entry is 30 7. Days only and the extension of stay are not allowed.
8. Conditions for Multiple Entry Visa are:
a. Applicant must show proof of sufficient fund for staying in Malaysia b. Posses valid and confirmed return ticket
c. Group tour is not eligible to apply for Multiple Entry Visa. d. Demand Draft of Rs750 (drawn in favor of The Consulate General e. Of Malaysia).
REVOCATION OF TRANSIT VISA FACILITY
Indian citizens who wish to enter Malaysia on transit to other countries Must obtain visa from Malaysian High Commission / Malaysian Consulate in advance as the facility for Transit Visa is no longer available.
The United States of America (also called the United States, the U.S., the USA, America, and the States) is a federal constitutional republic consists of fifty states and a federal district. The country is situated mostly in central North America, where its forty-eight contiguous states and Washington, D.C., the capital district, lie between the Pacific and Atlantic Oceans, bordered by Canada to the north and Mexico to the south. * TAXATION IN THE UNITED STATES
The United States of America is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees. Payroll taxes
Imposed by the federal and all state governments. These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011). Social Security tax applies only to the first $106,800 of wages in 2009 through 2011. Employers also must withhold income taxes on wages. An unemployment tax and certain other levies apply. Property taxes
Imposed by most local governments and many special purpose authorities based on the fair market value of property. School and other authorities are often separately governed, and impose separate taxes. Property tax is generally imposed only on property, though some forms of business property.
Imposed on the price at retail sale of many goods and some services by most states and some localities. Sales tax rates is from 0% to 16%, based on the particular goods or services taxed. Sales tax is collected by the seller at the time of sale.
Social Security and Medicare taxes
Federal social insurance taxes are imposed equally on employers and employees, consisting of a tax of 6.2% of wages up to an annual wage maximum ($106,800 in 2010) for Social Security plus a tax of 1.45% of total wages for Medicare. For 2011, the employee’s contribution was reduced to 4.2%, while the employer’s portion remained at 6.2%. To the extent an employee’s portion of the 6.2% tax exceeds the maximum by reason of multiple employers, the employee is entitled to a refundable tax credit upon filing an income tax return for the year. Unemployment taxes
Employers are subject to unemployment taxes by the federal and all state governments. The tax is a percentage of taxable wages. The tax rate vary by employer’s industry and experience rating. For 2009, the typical maximum tax per employee was under $1,000. Some states also impose unemployment, disability insurance, or similar taxes on employees. Import of goods taxes
Goods may be imported to the United States subject to import restrictions. Importers of goods may be subject to tax (“customs duty” or “tariff”) on the imported value of the goods. “Imported goods are not legally entered until after the shipment has arrived within the port of entry, delivery of the merchandise has been authorized by CBP, and estimated duties have been paid.” Licenses and occupational taxes
Many jurisdictions within the United States impose taxes or fees on the privilege of carrying on a particular business or maintaining a particular professional certification. These licensing or occupational taxes may be a fixed dollar amount per year for the licensee, an amount based on the number of practitioners in the firm, a percentage of revenue, or any of several other bases. Non resident’s taxes
Individuals and corporations not resident in the United States are subject to Federal income tax only on income from a U.S. business and certain types of income from U.S. sources. States tax individuals resident outside the state and corporations organized outside the state only on wages or business income within the state.
Excise taxes may be imposed on the sales price of goods or on a per unit or other basis. Excise tax may be required to be paid by the manufacturer at wholesale sale, or may be collected from the customer at retail sale. Excise taxes are imposed at the Federal and state levels on a variety of goods, including alcohol, tobacco, tires, gasoline, diesel fuel, coal, firearms, telephone service, air transportation, unregistered bonds, and many other goods and services.
Estate and gift tax
Estate and gift taxes in the United States are imposed by the Federal and most state governments. The estate tax is an excise tax levied on the right to pass property at death. It is imposed on the estate, not the beneficiary. Some states impose an inheritance tax on recipients of bequests.
* ENTRY REQUIREMENT
Electronic System for Travel Authorization (ESTA) is an electronic travel authorisation that all nationals of VWP countries must obtain prior to boarding a carrier to travel by air or sea to the United States under the VWP. This travel authorisation has been mandatory since Jan. 12, 2009. A fee of $14 will be charged for each new or renewed ESTA. All payments for electronic travel authorisation applications must be made by credit card or debit card when applying for or renewing an ESTA. The ESTA system currently accepts only the following credit/debit cards: MasterCard, VISA, American Express, and Discover. Your application will not be submitted for processing until all payment information is received. The following are the most common visa classifications under which a foreign national may temporarily work or train: * E-1- Treaty traders and their spouses.
* E-2- Treaty investors and their spouses.
* E-3-Australian specialty occupation workers and their spouses. * H-1B1-Specialty occupations for certain nationals of Singapore and Chile. * H-1C-Registered Nurses(Health Professional Shortage Area). * H-2A-Temporary agricultural workers.
* H-2B-Temporary workers performing other services or labor. * L-1A-Intra-company transferees (executives,managers).
* L-2-Spouse of an L-1A or L-1B.
* O-1-Foreign nationals who have extraordinary ability.
Since 16 June 2005 persons traveling to the United States have been required to present a machine readable passport to avail of the U.S. Visa Waiver Programme. Otherwise they must obtain a visa, in advance, from their nearest U.S. Diplomatic or Consular Mission. Ireland is one of the countries that can avail of visa waiver status and has been issuing machine readable passports since 1993.
Entry goods requirement
When a shipment reaches the United States, the importer of record (i.e., theowner, purchaser, or licensed customs broker designated by the owner, purchaser, or consignee) will file entry documents for the goods with the port director at the goods port of entry. Imported goods are not legally entered until after the shipment has arrived within the port of entry, delivery of the merchandise has been authorized by CBP, and estimated duties have been paid. It is the importer of record’s responsibility to arrange for examination and release of the goods.Pursuant to 19 U.S.C. 1484, the importer of record must use reasonable care in making entry. All goods imported into the United States are subject to duty or duty-free entry inaccordance with their classification under the applicable items in the Harmonized TariffSchedule of the United States. An annotated loose-leaf edition of the tariff schedule may be purchased from the U.S. Government Printing Office, Washington.
Baggage Security Reqirements
When travelling through the USA the Transportation Security Administration (TSA) has the right to break the lock off bags checked into the hold of an aircraft without any liability if they decide to search your bag. For this reason we recommend either leaving your bag unlocked or using a TSA approved lock when travelling through the USA. Prior Arrangements requirement the owner must make arrangements for shipping a vehicle. Have your shipper or carrier notify you of the vehicle’s arrival date so that Customs can clear it. Shipments are cleared at the first port of entry unless you arrange for a freight forwarder abroad to have the vehicle sent in bond to a Customs port more convenient to you. Customs officers are prohibited by law from acting as agents or making entries for an importer. However, you may employ a commercial customs broker to handle your entry.
India is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world. * TAXATION IN THE INDIA
Taxes in India are levied by the Central Government and the state governments. Some minor taxes are also levied by the local authorities such the Municipality or the Local Council. The authority to levy a tax is derived from the Constitution of India which allocates the power to levy various taxes between the Centre and the State.
In terms of the Income Tax Act, 1961, a tax on income is levied on individuals, corporations and body of persons. The rate of taxes are prescribed every year by the Parliament in the Finance Act, popularly called the Budget. A surcharge of 2.50% of the total tax liability is applicable in case the Payee is a Non-Resident or a Foreign Company; where the total income exceeds Rs 10,000,000. Entertainment tax
Entertainment tax is a tax on entertainment. In India, movie tickets, large commercial shows and large private festival celebrations may incur an entertainment tax.Entertainment falls in List 2 of the Seventh Schedule of the Constitution of India and is exclusively reserved as a revenue source for the state governments. Corporate Income Tax
This is another kind of direct tax in India. Corporate income tax is levied in many different forms in India. Corporate Income Tax is primarily meant to be paid by domestic corporations. Domestic corporations in India pay a minimum income tax rate of 35 percent along with a surcharge of 2.5 percent. Corporate income tax is also applicable to foreign organizations that have their own economic bases working in the country. These types of corporations are required to pay tax on 40 percent of their income along with a surcharge of 2 percent.
Sales Tax is the tax levied by the state government on goods bought and sold in the country. This policy is followed in most industrially developed countries in the world. The taxes levied under sales tax are not the same for all kinds of goods. The sales tax applicable on precious stones is 1 percent, 4 percent on goods of mass consumption like computers, cell phones, laptops, music systems, i pods, shoes, clothes etc. food are not taxed. There are other items like tobacco, petroleum, and liquor that are taxable but the percentage of tax levied generally varies according to the region. Service tax
Service tax is a part of Central Excise in India. It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax lies with the Central Board of Excise and Customs(CBEC). Tax Slabs in India
The announcement of new India tax slabs in the Union Budget 2011-12 brought some relief to the common man. According to the Finance Minister Pranab Mukherjee, the expansion of tax slabs will not only provide considerable respite to taxpayers but would also trigger savings and their consumption for infrastructure development. He has also declared a tax exemption on `20,000 for investing in tax saving infrastructure bonds, which would be over and above the current limit of ` 1 Lakh on tax discounts under section 80 C. Professional tax
In India, this tax is imposed by various states. It is imposed on business owners, working individuals, merchants and people carrying out various occupations. The following states impose this levy in India – Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamilnadu, Gujarat, and Madhya Pradesh. Professional tax is levied by particular Municipal Corporations and majority of the Indian states impose this duty.
Import Tax in India
Goods as well as services bought from the foreign countries are subjected to import tax in India. Recently, the special duty exemption scheme has released the importers from the burden of paying import duty for those import items which will facilitate production of export goods. Certain input norms and output norms have been developed for approximately 4,200 items and these norms have been formulated to decide the quantity of duty-free inputs to be imported for the production of a specific export item.
Other major taxation laws enacted by the Parliament are;
1. Wealth Tax Act, which has a regular history of being passed and repealed; 2. Service Tax, imposed under Finance Act, 1994, which taxes the provision of services provided by service providers within India or services imported by Indian from outside India; 3. Central Excise Act, 1944, which imposes a duty of excise on goods manufactured or produced in India; 4. Customs Act, 1962, which imposes duties of customs, countertrade duties and anti-dumping duties on goods imported in India; 5. Central Sales Tax, 1956, which imposes on goods sold in inter-state trade or commerce in India;
* ENTRY REQUIREMENT
You must obtain a visa before travelling to India; without one you will be refused entry Foreign nationals arriving in India on long term multiple entry visas must register with the nearest Foreigners Regional Registration Officer within 14 days of arrival. Over-stayers will be fined and may be prosecuted or detained and later deported. They may also need to appear in person at the Ministry of Home Affairs in Delhi. The High Commission/Deputy High Commission may not be able to intervene in these cases. India Visa Validity:
Visas are usually granted for 1 year. Visas may be issued for 5 or 10 years at the discretion of the consulate. 10 year visas are not issued in New York. Important: Travelers must leave India on or before the expiration of their visa. Travelers who remain in India beyond the validity of their visa could face detention and significant penalties. If your intended length of stay in India exceeds the validity of your existing visa, you must apply for a new visa. Indian Visa Processing Time: Visa processing time varies in different locations, depending on the state of residence of the applicant (see jurisdiction list below). Please visit our Consular Fee chart for estimated processing time in each location. In order to ensure that visa applications for most embassies/consulates are submitted on the day that we receive them, they should be shipped to us via FedEx Priority Overnight (not First Overnight or Standard Overnight). Non-refundable tickets or reservations should not be purchased until all visas and passports are secured and in your possession.
Original, signed passport valid for 6 months from day of application, and with at least two blank visa pages for Indian visa stamps. Amendment pages are not acceptable for visa stamps. Passport valid for at least 180 days and with at least two blank pages
Purchasing Property requirement
Seek comprehensive legal advice from a reliable source before investing in immovable property or businesses in India. There have been a significant number of cases where British and other foreign nationals have encountered serious difficulties, often because of misleading advice from unscrupulous agents and by not adhering to strict visa and Foreign Exchange Management Act (FEMA) regulations resulting in (often unwitting) illegal acquisition of property. There are strict rules preventing the purchase of property by non-Indian nationals, which cannot be bypassed (e.g. by registering a local company for the sole purpose of acquiring a property. Photography and use of technical equipment requirement
Equipment such as satellite phones, listening or recording devices, radio transmitters, powerful cameras or binoculars which are legal and available in the UK may require a licence for use in India. Seek advice from the Indian High Commission in London or your country of residence before bringing in such equipment.
Replacing a lost or stolen passport
If your travel document is lost or stolen notify the police immediately and obtain a police report. A replacement passport can only be applied for at New Delhi. However, Mumbai, Chennai, Goa and Kolkata can issue an Emergency Travel Document in dire emergencies. Straightforward applications are normally issued within 20 working days.
Doing business requirement
English is widely used in commercial circles, so there is little need for translation services. Indian businesspeople welcome visitors and are generally very hospitable. The common spoken greeting ‘namaste’, is normally accompanied by placing both hands together, as if in prayer, and tilting the head forward. Indian women may prefer not to shake hands, although men are comfortable with it. Unless invited to address a person by their first name, use Mr/Mrs/Dr and the surname. Business cards are an important part of networking. A suit is considered the proper form of business attire. Business hours are generally 0930-1730. Corporate entertaining is important but bear in mind the cultural etiquette. Indians only eat with the right hand. The left hand is used for less savory actions, such as removing shoes.
Gifts and business cards should be accepted with the right hand or both hands at the same time, as a sign of respect. If you’re invited to an Indian home for dinner, you may not eat until after 2300. However, once dinner is over, the party is at an end, the guest may depart without giving offence. Shoes should be removed when entering a private home and try to avoid pointing your feet at anyone. It is customary to wash one’s hands before and after a meal. Drinking, especially at lunchtime, should be avoided until visitors are certain of the host’s opinion. Even then, alcohol should always be consumed in moderation. Office hours: Mon-Fri 0930-1730, Sat 0930-1300. Economy:
Roughly 52% of the population is involved in agriculture, both subsistence (mainly cereals) and cash crops, including rice, tea, rubber, coffee and cotton. India’s main industrial development has been in engineering, iron and steel, chemicals, electronics and textiles. Since the 1990s, trade has been liberalised, the sprawling public sector cut back, and some state-owned industries sold off. India ranks among the top ten in the world by gross national product. The economy has resumed its healthy growth rate, currently at around 8.5% per annum, while inflation is at 8.7%. The unemployment rate hovers around 9.4%. Further improvements to the national infrastructure and basic services are now seen as the priority for central and regional governments. GDP:
US$1.53 trillion (2010).
Textiles, gems and jewellery, technology services, chemicals and leather manufactured goods. Main imports:
Crude oil, machinery, gems, iron, steel, fertilizer and chemicals. Main trading partners:
USA, United Arab Emirates, China, Saudi Arabia, Australia, Germany and Singapore.
Staying in touch in India
Roaming agreements exist with most international mobile phone companies. Coverage is limited to major towns but is increasing all the time. Internet:
The internet can be reliably accessed from an increasing number of hotels and from internet cafés across the country, many now with Wi-Fi. Post:
Mail services are generally good, but delivery times are variable. Airmail service to Western Europe or the US takes up to two weeks. Post office hours:
Regional variations, but generally Mon-Sat 1000-1300 and 1330-1630 in bigger towns and cities. Media:
The state’s TV monopoly was broken in 1992, resulting in a boom of private channels. News and entertainment shows are especially popular and a number of 24-hour news channels operate in India. India’s cable TV market is one of the worlds largest. Public TV is run by Doordarshan, while STAR Plus, owned by News Corporation, is one of the most popular private channels. Private radio stations were sanctioned in 2000, but only public All India Radio is allowed to broadcast news. Newspaper circulation has risen, thanks to a growing middle class, as has the number of Internet users to over 100 million. Many newspapers are in English; the most important include The Economic Times, The Hindu, Hindustan Times, Indian Express, Punjab Kesari, Deccan Herald, The Statesman, The Pioneer and The Times of India. Entry with pets
An incoming passenger can import up to two pets at one time. These include all domestic animals such as dogs, birds, cats etc subject to production of required health certificate from their country of origin. Pets are still liable for the usual quarantine checks upon arrival.
Foreign Direct Investment Policy requirement
Proposals require an industrial licence and cases where foreign investment is more than 24% in the equity capital of units manufacturing items reserved for the small scale industries.
Process of market entry requirement
The process of market entry contains a sequence of steps starting from the time when a company desires to enter a foreign market to the time it establishes its operation in the new market.
The fifth largest country in the world, Brazil is a Portuguese-speaking country with a robust economy. It consists of 26 states. Tourist facilities are excellent in major cities, but vary in quality in remote areas. Read the Department of State’s Background Notes on Brazil for additional information.
* TAXATION IN THE BRAZIL
Brazil is known for charging a high tax burden from its citizens and companies established. We will provide an overview of the most common taxes in Brazil, dividing them into Federal, State and Municipal taxes. Taxes are an important part of doing business in Brazil. In fact, more than half of the inquiries we receive from our readers are related to taxation. Although this round-up of the 16 most common taxes in Brazil is giving you a high-level overview of what taxes will apply when doing business in Brazil, we strongly urge you to contact taxation experts that can evaluate your business case. Some of the taxes mentioned below are cumulative and others might be refundable if special conditions are met. CIDE Taxes
CIDE is the abbreviation for Contribuição e Intervenção no Domínio Econômico and corresponds to the economic domain intervention contribution and it applies to royalty payments, technology transfers and compensation of technology supply, and technical assistance. It must be paid by those who import or commercialize items and assets covered by the tax. The Rate is 10%.
Cofins is the abbreviation for Contribuição Social para o Financiamento da Seguridade Social and is a tax for Social Security Financing applied to the monthly invoicing. Contribuição Social para o Financiamento da Seguridade Social is a state tax paid by the companies who collect taxes based on added value. The Rate is 3% or 7.6%. CSLL Taxes
CSLL – or Contribuição Social sobre o Lucro Líquido das Pessoas Jurídicas – is a social contribution on net income that applies to the net profit. It is charged over every legal entity resident in the country and those that are treated by tax legislation.The Rate is from 9% to 15%.
Imposto sobre a Importação, or simply II in Portuguese, is an import duty that applies to the entrance of foreign products in Brazil. It is charged over the importer, the recipient of the international shipping named by the sender; the one who is acquiring the commodity and the bidder of seized or abandoned products. Rate: Can be found in our tax database. Brazil IOF taxes
IOF is a tax charged over financial transactions, such as operations involving credit, currency exchange, insurance and security. In credit operations, it is paid by private people and legal entities that use credit; in exchange operations, by those involved in transactions concerning foreign currency; in insurance operations. It is paid by insured legal entities and private people; in security operations, by those who acquired security and financial institutions. The Rate is From 1% to 25%. IPI
Short for Imposto sobre Produtos Industrializados, IPI is applied to the output of national goods from the factory, to customs clearance when the product comes from abroad and to public sales. Produtos Industrializados is a federal paid by the industry owner and by the importer of the goods. The Rate is From 0% to 300%, more information can be found in our tax database. ICMS
ICMS, is a value-added tax on sales and services and applies to the movement of goods, transportation and communication services, and to the supplying of any goods. It is paid by private people and legal entities who commercialize any good; by those who import products from abroad; those who acquired the goods seized by customs and those who acquire petroleum products from abroad. The Rate is from 7% to 25%. IPVA
(IPVA) is a vehicle tax applied to the possession of motorized vehicles (cars, trucks, motorcycles, airplanes, boats, etc).IPVA is a state tax and must be paid by anyone who owns a motorized vehicle. The Rate to From 2% to 5%. IPTU
(IPTU) is a real-estate tax applied to the property located within urban limits. IPTU is a tax charged by the municipality and must be paid by the property’s owner. Rate is varies according to the municipality. ITBI
ITBI, or Imposto sobre Transmissão Inter Vivos de Bens Imóveis e de Direitos a eles Relativos, applies to the property and transmission rights related to it.Imposto sobre Transmissão Inter Vivos de Bens Imóveis e de Direitos a eles Relativos is a municipal tax and it is paid by the buyer or the transferee of the property or right. The Rate is usually 2%. ISS
Imposto sobre Serviços (ISS) is a tax applied to the services provided to a third party by a company or professional and is paid by the service provider. The calculation basis comprises the monthly income of the taxpayer and the price of the service. The Rate is around 5%.
Brazilian tax – Simples national
In the past small entrepreneurs spent lots of time and resources calculating and filling tons of tax payment forms. This scenario started to change towards the end of the 90’s, when the government started to implement tax systems in different regions to merge several taxes into one. By July 2007 these regional systems were united and Simples National started to take effect. What is Simples National?
Simples National is a simplified taxation system designed for mini or small Brazilian business. According to the government definition, mini enterprises (microempresas or ME) are business that in a calendar year had a gross income equal or lower than BRL 240.000,00. Small companies, called Empress de pequeno porte or EPP in Portuguese are business that earn a gross income over BRL 240.000,00, but equal or lower than BRL 2.400.000,00. Simples National will allow your business to pay several taxes using a single payment form. The main characteristics of this system are: * Allows you to calculate and pay 6 different federal taxes, one state tax and one municipal tax in a single tax payment form called PGDAS. * It is optional, but once you choose this taxation system you cannot opt out during the calendar year. * Calculation can be easily done on the Internet.
* Unique taxation system for the whole country.
* Lower taxes.
Why are the taxes in Brazil so high?
Brazil’s high tax burden that surpasses 33% of the country’s GDP is loved and hated by foreigners as well as locals. Hillary Clinton has even been stating that she admires the Brazilian tax policies while Apple CEO Steve Jobs has put the opening of a retail store in Brazil on hold due to the high tax burden. Despite having one of the highest taxation regimes in the world, public investment levels in Brazil is one of the lowest.
Paying for improved life quality for lower classes
The Brazilian government spends money as fast as it collects it. Socialism
has for long been the most secure way for politicians to be re-elected in Brazil. Even the most conservative politicians in Brazil will have to talk about social inclusion in order to stand a chance to be elected. The general trust in politicians in Brazil is remarkably low, only 14% of the population state that they trust the parliament. It is mandatory to vote in Brazil and as in any other democracy, every vote counts the same and since a large part of the population belongs to the poorer social classes socialism is a secure way for re-election. Social welfare programs like Bolsa Família were a direct reason to ex-president Lula’s re-election in 2006. While Bolsa Família has reduced short-term poverty for 44 million Brazilians by direct cash transfers, investment into public health system and other public tasks are not prioritized.
* ENTRY REQUIREMENT
Brazil requires U.S. citizens to carry a valid U.S. passport and visa when traveling to Brazil for any purpose. You must obtain your Brazilian visa in advance from the Brazilian Embassy or Consulate nearest to your place of residence in the United States. There are no “airport visas” and immigration authorities will refuse entry into Brazil to anyone not possessing a valid visa. The U.S. government cannot assist you if you arrive in Brazil without proper documentation. Travelers under 18 years of age and their parents should carefully review the visa application requirements. The adjudicating official at the Brazilian Embassy or Conulate may require a birth certificate and notarized travel authorization to issue a visa to a minor. Local/Regional Content Requirements:
The Brazilian Automotive Program requires established automobile manufacturers to Source 60 percent of all auto parts locally, whereas “newly-established” Manufacturers are required to source 50 percent locally during the first three years of Production and 60 percent thereafter.
Bilateral Quota System: The Governments of Argentina and Brazil allow local Automakers to import a certain number of cars and trucks from each other duty-free. This quota is adjusted each year by the respective Governments. As of January 1, 2008, this ―flex-program‖is based on a ratio of Brazil (1.00) to Argentina (1.95).
A mechanism of multiple compensations exists under the authority of Argentine Decree 939 of 2004 which approved and regulates the Additional Protocol #14 to the 2002 Economic Cooperation Agreement (ECA) between Argentina and Brazil. Article 13 of the ECA established a bilateral quota system until December 31, 2005. Argentina has extended it sine die.
Imports of used automobiles into Brazil are not allowed under any circumstances, and special authorization is required for the import of used parts. Brazil also has a ban on diesel passenger car imports, but still exports diesel cars to Argentina. Argentina is also currently considering a similar ban on imports and production of diesel passenger cars. There is a possibility this ban will be extended to the entire MERCOSUR region; however, this has yet to be determined under the CAP negotiations.
Brazil’s import tariffs range from 0 percent to 35 percent, with an average applied tariff rate of 11.6percent in 2010. Brazil’s average bound tariff in the WTO is significantly higher, at 31.4 percent. Giventhe large disparities between bound and applied rates, U.S. exporters face significant uncertainty in Brazil’s market because the government has the ability to raise applied rates to bound levels in an effort to manage prices and supply. Average applied tariffs in Brazil have risen by three percentage points since 2007, and are imposed on the vast majority of imports. These high ad valorem tariffs affect U.S. exports across diverse sectors including automobiles, auto parts, electronics, chemicals, plastics, textiles, and apparel.
Import Licensing/Customs Valuation/Trade Remedies
All importers must register with the Secretariat of Foreign Trade (SECEX) to
access Brazil’s “SISCOMEX” computerized trade documentation system. SISCOMEX registration requirements are onerous, including a minimum capital requirement. However, the SISCOMEX system, updated in early 2007, has cut the wait time for import-export license processing almost in half. Fees are assessed for each import statement submitted through SISCOMEX. Brazil has both automatic and non-automatic import license requirements. Brazil’s non-automatic import licensing system covers imports of products that require authorization from specific ministries or agencies, such as beverages retail price rather than recognizing the company’s stated transaction value. In recent years, Brazil has become a more active user of trade remedies. In 2010, Brazil initiated AD investigations on U.S. exports of n-butanol, toluene diisocyanate, nitrile rubber and light weight coated paper.