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Japan to India · PE

Permanent establishment risk for Japanese companies in India

CA Utsav Dogra, Chartered Accountant, ICAI M. No. 542375 · Updated

In brief

A Japanese company that has a fixed place, a dependent agent or a long project in India can become taxable in India on the profits attributable to it. Under the India–Japan tax treaty: Risk comes mainly from a fixed place, dependent agents and installation projects beyond the treaty period, so watch seconded managers who negotiate in India.

What is specific to Japanese companies

Chuzaiin who negotiate or sign contracts in India are the main dependent-agent risk.

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Questions

Does having a subsidiary create a PE for the parent?

Not by itself. Risk arises from what parent staff or the subsidiary's people do on the parent's behalf.

General information as at 5 November 2026, not advice for a particular case. Indian and Japanese rules change often; confirm the current position before acting. Japanese law points should be confirmed with a Japanese adviser.

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