Withholding tax on royalty and technical service fees revised; applicable rate depends on date of the underlying agreement. The amendment restricts the clause on dividends to apply only to dividends other than dividends referred to in section 115-O and substitutes sub clauses ... Summary
Withholding tax on royalty and technical service fees revised; applicable rate depends on date of the underlying agreement.
The amendment restricts the clause on dividends to apply only to dividends other than dividends referred to in section 115-O and substitutes sub clauses setting tax calculations for royalty and fees for technical services. Each of those incomes is taxed at one of two prescribed rates determined by whether the governing agreement was entered on or before, or after, the stipulated cutoff date, thereby applying a date of agreement test to determine the applicable rate.
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