Simple rates. The hard decisions are structural.

Broadly ten per cent across the board — dividends, interest, royalties and fees for technical services. Against India's domestic rate on royalties and technical fees the saving is substantial. The uniformity is itself a practical benefit: a contract that mixes a technology licence with engineering support does not have to be split for withholding purposes, which removes the most common source of dispute under treaties that price the two differently.

It does not operate in the way the US, UK and Canadian treaties do. Those treaties only tax technical and consultancy fees where the service leaves the payer able to apply the knowledge independently, which removes a large category of ordinary consulting from Indian tax. The Japanese treaty applies its capped rate to technical service fees more directly. So a Japanese group should not assume that a service fee escapes Indian tax merely because no technology was transferred — that reasoning belongs to a different treaty.

It is the decision that shapes everything else and it is rarely a tax decision alone. A wholly owned subsidiary gives full control, simpler governance and the exemption from independent directors that applies to wholly owned subsidiaries. A joint venture gives you a partner with market access and distribution, at the cost of a shareholders' agreement, reserved matters, exit provisions and a more complex transfer pricing position because not all the value stays in the group. Japanese groups have historically favoured joint ventures for market entry and moved to wholly owned structures later, which is itself a transaction with its own tax cost.

At arm's length, benchmarked and documented, and separately from any equipment supply or engineering support in the same arrangement. The withholding rate does not change between the legs under this treaty, but transfer pricing does not care about that — each element has to stand on its own, and the annual accountant's report on international transactions covers all of them. A single blended royalty covering licence, support and spares is the arrangement most likely to be adjusted.

Yes. An employee posted between India and Japan can remain in their home social security scheme and be exempted in the host country on a certificate of coverage, rather than contributing to both systems. This matters particularly for Japanese nationals on an Indian payroll, who would otherwise fall within the international worker rules and contribute to the Indian provident fund on full salary with no wage ceiling. The exemption is claimed with the certificate, not granted automatically.

Potentially, and it is separate from the social security question. Where a parent seconds employees to its Indian company and recharges the cost, that arrangement has been held capable of amounting to a supply of manpower services rather than a simple reimbursement of salary, bringing indirect tax on the recharged amount payable by the Indian company. It turns on the specific facts of the contracts and who the real employer is. Japanese groups make heavy use of secondment, so this is worth reviewing before it is raised rather than after.

A fixed place of business, a building site or installation or assembly project exceeding the period in the treaty, or a dependent agent habitually concluding contracts. The construction and installation limb is the one that catches Japanese plant and equipment suppliers: a project running longer than planned converts a supply contract into a taxable Indian presence, with a return to file and profits to attribute. Track the duration against the threshold from the start of the project, not at the end.