PAN for a Korean Company

[Pradeep Kaushik]

Respected Sirs,

We have to make a royalty payment to our Korean Company . On the Royalty payment there is liability to deduct TDS @ 20.6%.

Our Auditors suggested to get that PAN from the India Tax Authority to avail the beneficial tax rate.

Is it possible to obtain PAN for a Korean Company. If Yes, please let me know the procedure. After getting the PAN what section of TDS will be applicable on that Korean Company, how we issue the TDS Certificate and how that Korean Company will get the benefit of the TDS certificate.

Please clarify in details.

Best Regards.

Pradeep Kaushik

AI Summary

Korean Company Seeks PAN for Lower TDS Rate; Applicable Under Section 206AA and 195, Form 16A Required A company in India needs to make a royalty payment to a Korean company and is required to deduct TDS at 20.6%. Their auditors advised obtaining a PAN from the Indian Tax Authority to benefit from a lower tax rate. The query seeks to understand if a Korean company can obtain a PAN, the applicable TDS section, and the process for issuing a TDS certificate. The response clarifies that the TDS rate should be 20% under section 206AA, deductible under section 195, with certificates issued in Form 16A. The Korean company can benefit from the India-Korea DTAA.