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Professional fees paid to dubai

CA. Kanhaiyalal Gupta (Taxation Incharge) (93 Points)

29 May 2013

Dear All,

What will be TDS rate on payment of Professional fees to Dubai

Thanks

Kanhaiyalal Gupta

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(Guest)

NON RESIDENT NON CORPORATE PERSON

TDS RATE IS 25.75 FROM A/Y 2014-15 IF PAYMENT IS LESS THAN 1 CRORE.

TDS RATE IS 28.325 IF PAYMENT IS MORE THAN ONE CRORE .

NON DOMESTIC COMPANY

TDS RATE IS 25.75 FROM A/Y 2014-15 IF PAYMENT IS LESS THAN 1 CRORE.

IN CASE PAYMENT IS MORE THAN 1 CRORE.TDS RATE IS 26.265

IN CASE PAYMENT IS MORE THAN 10 CRORE.TDS RATE IS 27.0375.

IF RATES IN DTAA IS LESS THAN RATES GIVEN ABOVE, THEN DTAA RATES WILL BE APPLICABLE.

THERE IS NO SPECIFIC MENTION OF FEES FOR TECHNICAL SERVICES/PROFESSIONAL FEES IN THE DTAA.THE SAME WILL BE TAXED UNDER BUSINESS PROFITS OR INDEPENDENT PERSONAL SERVICES.

https://www.chdcaprofessionals.com/2013/05/TDSTCSRATESFY201314.html REFER RATES FOR TDS A/Y 2014-15 FOR CLARIFICATION

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CA. Kanhaiyalal Gupta (Taxation Incharge) (93 Points)
Replied 29 May 2013

We are paying Professional Fees for Preparation of Documents and other services outside of India i.e. in Dubai but we are paying them from India

1 Like

CA. Kanhaiyalal Gupta (Taxation Incharge) (93 Points)
Replied 29 May 2013

As per my point of view TDS will be nill as per Article 14 between India and Dubai DTAA

(Guest)

IT DOESNT MAKE ANY DIFFERENCE.YOU HAVE TO DEDUCT TDS ON PAYMENTS MADE TO NON RESIDENT PERSON OUTSIDE INDIA.FOR THIS U REQUIRED 15CB , 15CA FROM CHARTERED ACCOUNTANT IN PRACTICE.

work is worship (Service) (2728 Points)
Replied 29 May 2013

Very clearly explained by Rajiv

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CA. Kanhaiyalal Gupta (Taxation Incharge) (93 Points)
Replied 29 May 2013

Yes 15 CB is must for payments of any professional fees but the question of TDS, wheather TDS will be liable or not

(Guest)

THE LIABILITY IS ON CHARTERED ACCOUNTANT WHO SIGN FORM 15CA.U HAVE TO DEDUCT TDS IN CASE OF PAYMENT MADE TO NON RESIDENT.ARTICLE 14 DOES NOT STATE U DONT HAVE TO DEDUCT TDS.

CA. Kanhaiyalal Gupta (Taxation Incharge) (93 Points)
Replied 29 May 2013

Rajive, we are taking all the services in Dubai and as per Article 14-

Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State,

(Guest)

MR. KANHAIYALAL , U CAN GO WITH UR VIEW POINT BUT MY VIEW POINT IS SAME.IF U DONT DEDUCT TDS, LIABILITY WILL BE ON U TO EXPLAIN WHY U DIDNT DEDUCT TDS.ON A SAFER SIDE, U SHOULD MAKE PAYMENT AFTER DEDUCTING TDS.

Mayank Maheshwari (Article assistant) (99 Points)
Replied 29 May 2013

I agree you Mr. Kanhaiyalal Gupta, your contention is true in respect of your query.

"ARTICLE 14 - Independent personal services

1. Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State, except in the following circumstances when such income may also be taxed in the other Contracting State :

(a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State ; or

(b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in the relevant "previous year" or "year of income", as the case may be; in that case only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.

2. The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants."