Goodbye double taxation for Indians abroad

There’s good news for Indian nationals working abroad. Delhi has decided to ink a series of pacts with various countries to prevent double taxation of and double social security contributions, such as provident fund, by such Indian professionals.

Indians working abroad have to make social security contributions and pay taxes in India as well as in the country of their posting. But now on, professionals on deputation in their Indian employers’ foreign offices for a short duration of 5-6 years will be exempt from social security contributions there, provided they are covered under the Indian social security system and continue to contribute to it during the period of contract.

All other employed or self-employed persons will be governed by the laws of host countries, but will be allowed to export benefits in case of relocation after having made social security contributions during a longer term employment.

Short-duration employees will get refund of contributions at the time of relocation. The agreements also provide for totaling of insurance periods in both countries to determine benefits.

Officials in the ministry of overseas Indian affairs said the agreements will make Indian companies more competitive since exemption from social security contribution will substantially reduce costs for their employees. Switzerland, Belgium, France and Germany are already in the loop, while other countries are likely to be signed on soon.