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

[Anuj Gupta]

The rate of TDS shall be 20% and not 20.6% under section 206AA.

TDS will be deductable u/s 195 and certificates be will be issued as are issued to domestic persons i.e.in Form 16A.

Korea company shall get the benifit of TDS deducted in India under India Korea DTAA.

 

Anuj

AI Summary

TDS on cross-border royalty payments: obtaining PAN enables standard withholding and certificate for treaty credit under DTAA. Cross-border royalty payments to a foreign company require tax withholding under the statutory non-resident payment provisions; obtaining a PAN for the foreign payee allows the payer to apply the standard withholding rate rather than the elevated non PAN rate. The payer issues a TDS certificate to the foreign payee in the same manner as domestic payees, specifically in Form 16A, and the foreign payee may claim relief or credit under the applicable double taxation avoidance agreement.