International Taxation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 December 2010 I am making payment to a German company by way of technical fee. Consequently, I have to withhold tax.

As per Sec 195, TDS is 10% and as per Article 12 of Indo - Germany treaty is also 10%. But, as per newly introduced Sec 206AA, I have to withhold @20%, because, non-resident is not having PAN.

My question is If, I withhold @20%, Germany company can claim tax credit of 20% or 10% at the time of filing the their return of income in germany as per Article 23 of Indo - Germany treaty?

Rajesh Kumar

Rajesh Kumar (Expert)
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04 December 2010 Section 206AA is applicable only when Tax is deducted under Chapter XVII-B. If the tax is being paid under Section 115A, Section 206AA is not applicable.