TDS RATE FOR REMITTANCE ABROAD

[JAYANTL AASHER]

A GERMAN COMPANY HAS RENDERED TECHNICAL SERVICES TO AN INDIAN COMPANY. THE REMITTEE IE THE GERMAN COMPANY HAS SUBMITTED TRC AND NO PE CERTIFICATE AND HAS PAN TOO. WHETHER TDS WILL APPLY? IF SO AT WHAT RATE TDS SHOUD BE DEDUCTED BEFORE MAKING PAYMENT TO THE GERMAN COMPANY?

AI Summary

TDS on Payments for Technical Services to German Company Taxable in India Under Section 9; Check DTAA for Rates. A German company provided technical services to an Indian company, raising a query about the applicability and rate of Tax Deducted at Source (TDS) on payments to the German company. The German company has submitted a Tax Residency Certificate (TRC), a No Permanent Establishment (PE) certificate, and has a PAN. The response clarifies that payments for technical services are taxable in India under section 9 of the Income Tax Act, regardless of the company's PE status. It advises checking the India-Germany Double Taxation Avoidance Agreement (DTAA) or applicable rates and suggests applying for a certificate for lower TDS rates.