Dear All
The facts are as follows:
B Ltd (India) is a subsidiary of A Ltd ( Japan ). A Ltd Japan recovers from B Ltd the cost of usage server.
In other words, the parent company in Japan incurrs cost of server and allocate the cost to its subsidiary company and
accordingly recovers the same from the Subsidiary company in India.
Query:
Is the Indian Subsidiary is required to deduct any TDS on payment made to Parent company for usage of Server located in Japan.
Please let me know any other information required to solve the query.
Clarification Sought on TDS Deduction for Server Usage Payments Under Section 195 Between Indian Subsidiary and Japanese Parent An Indian subsidiary, B Ltd, of a Japanese parent company, A Ltd, seeks clarification on whether it must deduct Tax Deducted at Source (TDS) under Section 195 for payments made to its parent company for server usage costs. One respondent suggests that withholding tax should be deducted as it falls under fees for technical services and royalties. However, if the payment is merely a reimbursement supported by an invoice from a third-party vendor in Japan, it may not require TDS deduction. (AI Summary)
TaxTMI 
TaxTMI 
