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Secondment Reimbursements to EY US Taxable as FTS: Delhi HC
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Delhi High Courttax

Secondment Reimbursements to EY US Taxable as FTS: Delhi HC

July 4, 2026

The Delhi High Court ruled that secondment reimbursements from EY US are taxable as fees for technical services (FTS) as employees impart technical knowledge to Indian entities.

Delhi HC Determines Taxability of Secondment Reimbursements

The Delhi High Court has held that reimbursements for secondment from EY US are subject to taxation as fees for technical services (FTS). The court asserted that the secondees make their technical knowledge, skills, and experience available to their corresponding entities in India.

This ruling aligns with existing legal interpretations regarding the nature of services rendered in international secondment agreements, where tax obligations are imposed based on the availability and utilization of technical expertise.

“The essence of the arrangement qualifies the reimbursements as FTS,” the court maintained.

The decision highlights the increasing scrutiny regarding cross-border transactions and the applicability of domestic tax laws to international service arrangements.

Legal practitioners should counsel clients involved in secondment agreements to evaluate the tax implications carefully, as the ruling establishes clear precedents regarding FTS characterizations in similar cases.

Citations

  • Delhi HC (2026)
Source:Delhi High Court
Practice Areas:tax

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