Each trip from US or Amsterdam must cost around $15K (USD). Business class is around $7K. Then hotel + meals + transport. It all adds up. Kind of interesting that I see people going to Bangalore who have very little decision making power.
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@sx4 explain with facts
@e7 KL is a more smarter and safer option.
Trading and supply leaders go constantly. They even fly their entire LT there just to sit in a mtg room. That group is awful
Bangalore trips come with Indian Tax Implications
Summary of the Situation
Chevron has invested approximately $1 billion in its Engineering and Innovation Excellence Center (ENGINE) located in Bengaluru, India. While this expansion is intended to improve efficiency and global project collaboration, there may be long-term tax and compliance costs associated with how the operation is structured under Indian law.
The following sections outline general, factual information based on standard international taxation frameworks such as Permanent Establishment (PE) and Transfer Pricing — not internal Chevron data.
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Permanent Establishment (PE) and Tax Liability
• If a foreign company establishes a fixed place of business in India (for example, an engineering or project office), Indian authorities may classify it as a Permanent Establishment (PE).
• This triggers tax obligations on profits attributed to work performed in India, even if the project serves clients elsewhere.
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Profit Attribution
• Under Indian law, part of a company’s global income can be taxed locally if significant value creation or management occurs in India.
• For instance, if Australian or U.S. projects are executed by teams in India, India can claim a portion of those profits for taxation.
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Taxation of Foreign Subsidiaries
• Corporate Tax: Subsidiaries or branches in India are taxed on income earned locally, typically around 22% (plus surcharge and cess).
• Transfer Pricing: Intercompany transactions (e.g., management fees, subcontracting, asset transfers) must follow India’s arm’s-length pricing rules.
• Withholding Tax: Payments from India to foreign parent entities (royalties, fees, or dividends) may face withholding taxes depending on applicable treaties.
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Cross-Border and Expat Implications
• Projects Managed from India: Even if work supports projects in Australia or the U.S., India can still tax the related income if the work is performed domestically.
• Foreign Expats in India: Employees from other countries working in India may be taxed under Indian income tax laws based on their residency status.
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Estimated Financial Impact (Industry Benchmarks)
Benchmarking studies (e.g., from KPMG and EY) indicate potential cost impacts in several areas:
• Transfer Pricing Adjustments: 5–15% increase in taxable income due to stricter cost scrutiny (e.g., management fees, FX losses, share-based pay).
• Profit Attribution: 15–25% of global project profits could be attributed to India for high-value engineering or design work.
• Compliance Costs: Ongoing regulatory, IT, and operational costs may total $2M–$5M annually depending on scale.
Five-Year Projection (2025–2030):
• Transfer Pricing Adjustments: estimated at $10 million to $20 million per year, totaling $50 million to $100 million over five years.
• Profit Attribution Tax Impact: estimated at $15 million to $30 million per year, totaling $75 million to $150 million over five years.
• Compliance and Administrative Costs: estimated at $2 million to $5 million per year, totaling $10 million to $25 million over five years.
• Total Global Business Unit Cost: approximately $27 million to $55 million per year, or $135 million to $275 million over a five-year period across all Chevron business units utilizing the Indian center.
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Strategic Considerations
While India offers substantial cost and talent advantages, aggressive profit attribution and tax compliance requirements could partially offset those savings. This highlights a broader issue many multinationals face when expanding shared services or engineering hubs abroad.
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Sources:
• Indian Income Tax Act and Transfer Pricing Rules
• OECD Guidelines on Permanent Establishments
• Public benchmarking data from KPMG and EY
Great tantric massages in Bangalore.
Went to BLR business class many times to stay in Marriot. Waste of time but hey everyone is wasting Shell money, so why not take a piece of the cake. I wish we outsoured to KL, much better place to be than BNG
@at then the future is not bright
bangalore is the future of the company and its a much easier life to have your people be in bangalore because they are so easy to get into projects due to cost
they’re probably encouraging it. it helps form the new world order
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