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

No Permanent Establishment certificate remains valid while the non PE condition persists, allowing reliance for withholding obligations. A No Permanent Establishment certificate may be relied upon for withholding under section 195 so long as the deductee continues not to have a permanent establishment in India; the deductor may request periodic issuance of the certificate and include contractual provisions to hold the deductee answerable if the certificate is false.