International taxation

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Querist : Anonymous

Querist : Anonymous (Querist)

20 October 2011 Hi All,
here is a query on International Taxation. Please help me on this issue.

What should be the withholding tax rate as per DTAA provisions of a company which have a permanent establishment in India?

Please answer this question after refering to the provisions of the DTAA with USA and relevant schedules in Finance Act 2010.

This query is regarding the Article 5 & 7 of DTAA with USA.
The income is considered as business profits of the other company.

Thanks

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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21 October 2011 The tax rate shall be 40% + 2.5 % surcharge + 3% education and Other cess on the income on NET BASIS. Also the income which is attributable to Permanent Establishment in India is taxable in india.

I would suggest that if the PE of foreign Company is involved in transactions with indian company then certificate from ITO u/s 195 or 197 should be preferably obtained.

Anuj
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