Indian companies, many of which have been acquiring overseas entities, suffer from taxation planning as part of the deals, said accountancy and consultancy firm Ernst & Young, announcing the launch of its outbound tax advisory services group in Mumbai on Wednesday.
Unlike Indian companies, US-based multinational companies are more efficient in their outbound tax planning.
"Their leverage planning in acquisition financing is well structured," said Jonathon Fox, E&Y's head of international tax services for Northern Europe, East Asia, India and Africa.
Besides, Indian companies have to pay tax in the investing country as well as in India.
Expecting a heightened cross-border activity by Indian companies, the firm said the new group would include several seasoned tax professionals from the US and Europe for assisting Indian companies in structuring their international transactions, repatriation strategies, tax efficient supply chain management, management of intellectual property, post acquisition restructuring and transfer pricing.
The group will work with Indian companies to identify locations that they can hold their international investment in a manner that is tax-efficient.
