DTAA between India and Taiwan?

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Suraj Rawat (Querist)
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07 February 2024 Hello,

I'm inquiring about the Double Taxation Avoidance Agreement (DTAA) between India and Taiwan. I need to make a payment for technical services to a Taiwanese party and wonder if they can benefit from this treaty. However, upon my research, I found a treaty between specified associations instead of the governments of both countries. Can we still avail the benefits of DTAA in this case? Any insights would be appreciated. Additionally, if anyone has information on the specified associations mentioned on the income tax website, that would be helpful too.

Thank you.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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06 July 2024 In the context of Double Taxation Avoidance Agreements (DTAA), it's crucial to determine whether the agreement between India and Taiwan covers the specific transaction you're involved in, especially concerning payments for technical services. Here's a breakdown of the situation:

1. **DTAA Coverage**: DTAA agreements are typically signed between governments to mitigate double taxation issues for residents of both countries. They specify the terms under which income earned in one country by a resident of the other country will be taxed. For India and Taiwan, the DTAA applies to residents (individuals and entities) of both countries.

2. **Specified Associations**: In some cases, DTAA benefits can extend to specified associations or entities that are recognized under the agreement, such as professional bodies or institutions. These entities must meet specific criteria outlined in the DTAA itself.

3. **Applicability to Payments for Technical Services**: Payments for technical services are often covered under DTAA provisions. Typically, the agreement will specify the conditions under which such payments can benefit from reduced withholding tax rates or exemptions.

4. **Research and Verification**: To ascertain whether your payment for technical services to a Taiwanese party can benefit from DTAA provisions, you should:

- Review the specific DTAA document between India and Taiwan. This document outlines the categories of income covered, the rates of tax applicable, and any conditions or exemptions.
- Check if the Taiwanese party qualifies as a resident under the terms of the DTAA.
- Verify if payments for technical services are explicitly covered and under what conditions (such as limits on taxation rates or other requirements).

5. **Consultation**: It's advisable to consult with a tax advisor or legal expert who specializes in international tax matters. They can provide guidance tailored to your specific situation and ensure compliance with both Indian and Taiwanese tax laws and the DTAA.

Regarding "specified associations," these are entities recognized under the DTAA for specific purposes. If you need more detailed information about these associations or entities as mentioned on the Indian income tax website, it's recommended to directly access resources provided by the Income Tax Department of India or seek professional advice.

In summary, while DTAA benefits are typically between governments, entities recognized under specified conditions (like associations) may also benefit under certain circumstances as outlined in the DTAA. Clarifying these points through proper research and consultation will help ensure compliance and maximize benefits under the treaty.