Foreign remmittance
This query is : Resolved
04 August 2017
x Ltd is making payment of royalty to Canadian company for usage of online data base.
Canadian company does not have PAN & TRC certificate.
Now Article 12 of DTAA between INDIA and CANADA read as under
(a)in the case of royalties referred to in sub-paragraph (a) of paragraph 3 and fees for included services as defined in this Article (other than services described in sub-paragraph (b) of this paragraph)
(i)during the first five taxable years for which this Agreement has effect
(A)15 per cent of the gross amount of the royalties or fees for included services as defined in this Article,
where the payer of the royalties or fees is the Government of that Contracting State, a political subdivision
or a public sector company; and
(B)20 per cent of the gross amount of the royalties or fees for included services in all other cases; and
(ii) during the subsequent years, 15 per cent of the gross amount of the royalties or fees for included services; and
(b)in the case of royalties referred to in sub-paragraph (b) of paragraph 3 and fees for included services as defined in this Article that are ancillary and subsidiary to the enjoyment of the property for which payment is received under paragraph 3(b) of this Article, 10 per cent of the gross amount of the royalties or fees for included services
Clause 3 of Article 12 reads as under
(a) payment of any kind received as a consideration for the use of, or the right to use, any copyright of a
literary, artistic, or scientific work including cinematograph films or work on film tape or other means of
reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or
model, plan, secret formula or process, or for information concerning industrial, commercial or scientific
experience, including gains derived from the alienation of any such right or property which are contingent
on the productivity, use, or disposition thereof; and
(b) payments of any kind received as consideration for the use of, or the right to use, any industrial,
commercial, or scientific equipment, other than payments derived by an enterprise described in paragraph
1 of Article 8 from activities described in paragraph 3(c) or 4 of Article 8.
Now my query is TDS should be applicable as per DTAA or Income tax act ? and at what rate (20% or 15% or 10%) TDS to be deducted?
Can we take benefit of beneficial rate as per circular No. 728, dated 30-10-1995
Canadian company does not have PAN & TRC certificate.
Now Article 12 of DTAA between INDIA and CANADA read as under
(a)in the case of royalties referred to in sub-paragraph (a) of paragraph 3 and fees for included services as defined in this Article (other than services described in sub-paragraph (b) of this paragraph)
(i)during the first five taxable years for which this Agreement has effect
(A)15 per cent of the gross amount of the royalties or fees for included services as defined in this Article,
where the payer of the royalties or fees is the Government of that Contracting State, a political subdivision
or a public sector company; and
(B)20 per cent of the gross amount of the royalties or fees for included services in all other cases; and
(ii) during the subsequent years, 15 per cent of the gross amount of the royalties or fees for included services; and
(b)in the case of royalties referred to in sub-paragraph (b) of paragraph 3 and fees for included services as defined in this Article that are ancillary and subsidiary to the enjoyment of the property for which payment is received under paragraph 3(b) of this Article, 10 per cent of the gross amount of the royalties or fees for included services
Clause 3 of Article 12 reads as under
(a) payment of any kind received as a consideration for the use of, or the right to use, any copyright of a
literary, artistic, or scientific work including cinematograph films or work on film tape or other means of
reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or
model, plan, secret formula or process, or for information concerning industrial, commercial or scientific
experience, including gains derived from the alienation of any such right or property which are contingent
on the productivity, use, or disposition thereof; and
(b) payments of any kind received as consideration for the use of, or the right to use, any industrial,
commercial, or scientific equipment, other than payments derived by an enterprise described in paragraph
1 of Article 8 from activities described in paragraph 3(c) or 4 of Article 8.
Now my query is TDS should be applicable as per DTAA or Income tax act ? and at what rate (20% or 15% or 10%) TDS to be deducted?
Can we take benefit of beneficial rate as per circular No. 728, dated 30-10-1995
05 August 2017
10% TDS applicable as per income tax. PAN not required TAN of foreign country is required.
06 August 2017
Sir foreign company dose not have TRC and certificate for NO PE.As per notification 53 of 2016 if payee does nt have PAN then TRC will required.
So now what will be rate
So now what will be rate
06 August 2017
No PE Is a self declaration with foreign THAN 10% TDS can be deducted.
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