Foreign payment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2018 AN IT COMPANY HAS TO PAY A CERTAIN AMOUNT TO ANOTHER COMPANY AS A PROFESSIONAL FEES OF USA. ARE THERE ANY TDS IMPLICATIONS OR ANY OTHER LAW WHICH COMES INTO FORCE?

Arpit

Arpit (Expert)
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02 February 2018 Whether TDS has to be deducted or not and at what rates will depend on many factors. Whether the US Company has a PE (Permanent Establishment) in India or not? Nature of professional services been provided to the Indian Company? You also need to see the DTAA (Double Taxation Avoidance Agreement) between INDIA and USA.

Please specify the above mentioned to get a proper answer.

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Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2018 Us company doesn't have any pe and it provided software development services

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Arpit

Arpit (Expert)
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03 February 2018 It appears that they are providing the technical service. But i need to see the detailed agreement to assess the rate of tax and liability. In the meanwhile, you should check the Article 12 of the DTAA between Government of the United States of America and the Government of the Republic of India. This will give you the better clarity. Prima Facie it appears that there will be TDS implications