Validity of a No Permanent Establishment Certificate from a deductor's point of view

[sooraj bharathraj]

What is the validity of a No Permanent Establishment Certificate(from a deductor's point of view). For eg if a certificate is dated 05-Sep-2009, from the Tax Deductor's point of view , till how long it is valid ?

[Rama Krishana]

No permanent establishment certificate is being issued by the person claiming that he has no permanent establishment in India. Therefore, as long as the condition which determines that a person is not having P/E in India, such certificate may be taken as valid certificate to determine the liability under section 195 of the Income Tax with respect to with holding tax. You may ask the deductee to issue No permanent establishment certificate from time to time make them answerable through some contract where such certificate is found to be false.

AI Summary

Clarifying No Permanent Establishment Certificate Validity for Tax Deductors Under Section 195 of the Income Tax Act. A discussion forum addresses the validity of a No Permanent Establishment Certificate from a tax deductor's perspective. The query seeks clarity on the duration of validity for such a certificate, using an example dated September 5, 2009. The response explains that the certificate remains valid as long as the conditions for having no permanent establishment in India are met. It suggests that deductors should regularly request updated certificates from deductees and include contractual terms to hold them accountable if the certificate is found to be false, ensuring compliance with section 195 of the Income Tax Act regarding withholding tax.