04 January 2010
No, You are not required to deduct any TDS on commission paid to agent in Europe for service received in Europe. In your case agent operates outside the country, no part of his income arise in India. Further payment is usually remitted directly abroad, it cannot be held to have been received by or on behalf of the agent in India. Such payent are therefore not taxable in India. Kindly alro refer the Circular no. 786 dt. 07.02.2000 the above view is also supported by CIT v. George Williamson (Assam) Ltd. (2008) 305 ITR (AT)422 (Gauhati)