26 September 2011
Whether TDS(Income Tax) is deductible from the payments to a Foreign Contractor of Netherland whom India has DTAA Treaty. If Yes, at what rate as the Foreign Contractor is not having PAN Number and how it will be shown under TDS Return without PAN Number.
please e-mail the reply at email ID: kathuriasushil@yahoo.com
THANKS
FROM
SUSHIL KATHURIA 09702219341
there is a specific mention of permanent establishment in the DTAA with Netherland as under:
"The profits of an enterprise of one of the States shall be taxable only in that State unless the enterprise carries on business in the other State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment".
What is the meaning of this permanent establishment. I would like to mention that there is contractor of netherland who has to under take the job of development of "Hockey Surface Ground" in Mumbai" within a stipulated period say six months to one year". Whether the contractor will come under the permanent establishment category. there is no specific mention of TDS in the DTAA.
26 September 2011
if there is dtta between Netherlands and India, tds shall be deducted on the rate mentioned in DTTA irrespective of Foreign Contractor is having PAN Number or not.
28 September 2011
If the payment is for technical services as defined under section 9(1)(vii) of Income Tax Act then TDS@ 20% should be deducted if the foreign party doesn't have PAN and 10.51% if foreign party party has a PAN.
Anuj +91-9810106211 femaquery@gmail.com
(The above reply is based on limited information available in the query. Kindly check the same with your consultant before taking any final view on the matter)
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