17 May 2011
hi experts please provide me with feed back on the following query.
If an Indian company has a branch outside India and it transfers funds to its foreign branch to meet expenses. Now when the foreign branch makes payments to foreign vendors will it be considered similar to the Indian company making payments to foreign vendors and will the tax withholding provisions apply?? Does the TDS provisions have to be complied with in making payments to foreign vendors "through the foreign branch of the Indian company" ?
18 May 2011
TAX WITHHOLDING COMES IN THE PICTURE ONLY IF U ARE MAKING PAYMENT TO A NON-RESIDENT OF INTEREST OR OTHER SUMS WHCICH ARE CHARGEABLE UNDER THE ACT IN THIS CASE THERE IS NO QUESTION OF SUMS PAID BEING CHARGEABLE TO TAX(ON THE FACTS DISCLOSED) HENCE NO LAIB TO W/H TAX
18 May 2011
Yes as per Income Tax Act the foreign branch is a resident , hence the provisions of TDS are applicable. However the exemptions provided u/s 9 can be availed before making any payment of interest,royalty and FTS.
CAclubindia
