DTTA WITH CHINA

[MAHESH KOPPANETH UNNIKRISHNAN]

Dear Sir ,

We need to remit thousand USD to a co. having PE in China.

They have conducted a workshop in Pune on various strategies of increasing sales volumes .

Faculty came from China , delivered lectures /workshops for 3 days and have gone back.

Do we need to deduct withholding tax and at wot rate?

Regards,

C.A.MEENAKSHI GUPTA

[DR.MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in this issue? If not please inform.

AI Summary

Withholding tax on cross-border service payments may arise where services are performed in India and attributable to a foreign enterprise's PE. Whether withholding tax must be deducted on payments to a foreign company for short-term services performed in India hinges on payment characterization and whether the income is attributable to a permanent establishment. If the workshop services are attributable to a PE in India, India may tax the income and require withholding; if not attributable and the DTAA excludes taxation in India or provides relief, reduced withholding or exemption may apply. Factual determination of place of performance, nature of presence or agent, and relevant DTAA articles is required.