India: Updated Safe Harbor Rules Issued

The tax authority in India recently issued revised safe harbor rules as follows:

• The safe harbor rates have been reduced from a range of 20% - 22% to 17% - 18% for information technology services.
• The safe harbor rates will be 18%, 21% or 24% depending on the percentage of employee cost to operating cost (reduced from 25%) for “knowledge process outsourcing” services.
• For contract research and development (R&D) service providers, the safe harbor rates have been reduced from a range of 29% - 30% to 24%.