Tds deduction by bangladesh client

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Ajay ghose (Querist)
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17 April 2018 Dear Sir,

We are into technical service and we provide Data Analytics services. Our client is in Bangladesh and they have asked us that they will deduct TDS @ 20%. We will provide the services from India and hence no PE in Bangladesh. Now my question is -
1. Whether TDS rate mentioned above is correct?
2. Whether we will be able to take credit of the TDS deducted in Bangladesh, in our tax returns?
3. What documents we need to follow?

Thanks in advance for quick clarification.

Regards

Ajay

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 April 2018 1. Not sure where the 20% is coming from. Ask your client to provide relevant clause of India-Bangladesh DTAA.

2. Yes, you would be able to claim the credit for the tax deducted.

3. Your client will provide you with the details of the tax paid against payments made to you

Ajay ghose

Ajay ghose (Querist)
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17 April 2018 I checked and noted that 20% is the rate of TDS applicable for technical service provided by non-residents. There is no specific mention in the DTAA with Bangladesh.

Since we are non-residents in bangladesh, does the client supposed to deduct the TDS since our income is taxed in India..

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 April 2018 i will suggest you let a professional international taxation guy to look at the DTAA to ensure that you dont suffer excessive tax withholding.

As such the client is supposed to deduct the taxes as per the local provisions of Bangladesh and only refer to DTAA in case there is a beneficial clause for you