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A person responsible for making payments to non-resident or foreign companies is required to withhold tax. Tax is deductible at the rates prescribed under the Act or under the relevant DTAA, whichever is more beneficial for non-resident.

This write up provides all such rates as prescribed under various Double Taxation Avoidance Agreements entered into between Indian and various foreign countries.

Withholding Tax Rates as per DTAA

Withholding Tax Rates*

Country

Dividend

Interest

Royalty

Fee for Technical Services

Albania

10%

10%[Note1]

10%

10%

Armenia

10%

10% [Note1]

10%

10%

Australia

15%

15%

10%/15%

[Note 2]

10%/15%

[Note 2]

Austria

10%

10% [Note1]

10%

10%

Bangladesh

a) 10% (if at least 10% of the capital of the company paying the dividend is held by the recipient company);

b) 15% in all other cases

10% [Note1]

10%

No separate provision

Belarus

a) 10%, if paid to a company holding 25% shares;

b) 15%, in all other cases

10% [Note1]

15%

15%

Belgium

15%

15% (10% if loan is granted by a bank)

10%

10%

Bhutan

10%

10% [Note 1]

10%

10%

Botswana

a) 7.5%, if shareholder is a company and holds at least 25% shares in the investee-company;

b) 10%, in all other cases

10% [Note1]

10%

10%

Brazil

15%

15% [Note1]

a) 25% for use of trademark;

b) 15% for others

No separate provision

Bulgaria

15%

15% [Note1]

a) 15% of royalty relating to literary, artistic, scientific works other than films or tapes used for radio or television broadcasting;

b) 20%, in other cases

20%

Canada

a) 15%, if at least 10% of the voting powers in the company, paying the dividends, is controlled by the recipient company;

b) 25%, in other cases

15% [Note1]

15%-20%

15%-20%

China

10%

10% [Note1]

10%

10%

Columbia

5%

10% [Note1]

10%

10%

Croatia

a) 5% (if at least 10% of the capital of the company paying the dividend is held by the recipient company);

b) 15% in all other cases

10% [Note1]

10%

10%

Cyprus

10%

10% [Note1]

10%

10%

Czech Republic [Note5]

10%

10% [Note1]

10%

10%

Denmark

a) 15%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;

b) 25%, in other cases

a) 10% if loan is granted by bank;

b) 15% for others [Note1]

20%

20%

Estonia

10%

10% [Note1]

10%

10%

Ethiopia

7.5%

10% [Note1]

10%

10%

Finland

10%

10% [Note1]

10%

10%

Fiji

5%

10% [Note 1]

10%

10%

France

10%

10% [Note1]

10%

10%

Georgia

10%

10% [Note1]

10%

10%

Germany

10%

10% [Note1]

10%

10%

Hongkong

5%

10% [Note1]

10%

10%

Hungary

10%

10% [Note1]

10%

10%

Indonesia

10%

10% [Note1]

10%

10%

Iceland

10%

10% [Note1]

10%

10%

Iran

10%

10%

10%

10%

Ireland

10%

10% [Note1]

10%

10%

Israel

10%

10% [Note1]

10%

10%

Italy

a) 15% if at least 10% of the shares of the company paying dividend is beneficially owned by the recipient company;

b) 25% in other cases

15% [Note1]

20%

20%

Japan

10%

10% [Note1]

10%

10%

Jordan

10%

10% [Note1]

20%

20%

Kazakhstan

10%

10% [Note1]

10%

10%

Kenya

10%

10%

10%

10%

Korea

15%

10%

10%

10%

Kuwait

10% [Note 1]

10%

10%

10%

Kyrgyz Republic

10%

10% [Note1]

15%

15%

Latvia

10%

10% [Note1]

10%

10%

Lithuania

5%*, 15%

10% [Note1]

10%

10%

Luxembourg

10%

10% [Note1]

10%

10%

Malaysia

5%

10% [Note1]

10%

10%

Malta

10%

10% [Note1]

10%

10%

Mongolia

15%

15% [Note1]

15%

15%

Mauritius

a) 5%, if at least 10% of the capital of the company paying the dividend is held by the recipient company;

b) 15%, in other cases

7.5

15%

10%

Montenegro

5% (in some cases 15%)

10% [Note1]

10%

10%

Myanmar

5%

10% [Note1]

10%

No separate provision

Morocco

10%

10% [Note1]

10%

10%

Mozambique

7.5%

10% [Note1]

10%

No separate provision

Macedonia

10%

10% [Note 1]

10%

10%

Namibia

10%

10% [Note1]

10%

10%

Nepal

5%**, 10%

10% [Note1]

15%

No separate provision

Netherlands

10%

10% [Note1]

10%

10%

New Zealand

15%

10% [Note1]

10%

10%

Norway

10%

10% [Note1]

10%

10%

Oman

a) 10%, if at least 10% of shares are held by the recipient company;

b) 12.5%, in other cases

10% [Note1]

15%

15%

Philippines

a) 15%, if at least 10% of the shares of the company paying the dividend is held by the recipient company;

b) 20%, in other cases

a) 10%, if interest is received by a financial institution or insurance company;

b) 15% in other cases

[Note1]

15% if it is payable in pursuance of any collaboration agreement approved by the Government of India

No separate provision

Poland

10%

10% [Note1]

15%

15%

Portuguese Republic

10%***/15%

10%

10%

10%

Qatar

a) 5%, if at least 10% of the shares of the company paying the dividend is held by the recipient company;

b) 10%, in other cases

10% [Note1]

10%

10%

Romania

10%

10% [Note1]

10%

10%

Russian Federation

10%

10% [Note1]

10%

10%

Saudi Arabia

5%

10% [Note1]

10%

No separate provision

Serbia

a) 5%, if recipient is company and holds 25% shares;

b) 15%, in any other case

10% [Note1]

10%

10%

Singapore

a) 10%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;

b) 15%, in other cases

a) 10%, if loan is granted by a bank or similar institute including an insurance company;

b) 15%, in all other cases

10%

10%

Slovenia

a) 5%, if at least 10% of the shares of the company paying the dividend is held by the recipient company;

b) 15%, in other cases

10%

10%

10%

South Africa

10%

10% [Note1]

10%

10%

Spain

15%

15% [Note1]

10%/20%

[Note 3]

20%

[Note 3]

Sri Lanka

7.5%

10% [Note1]

10%

10%

Sudan

10%

10%[Note1]

10%

10%

Sweden

10%

10% [Note1]

10%

10%

Swiss Confederation

10%

10%[Note1]

10%

10%

Syrian Arab Republic

a) 5%, if at least 10% of the shares of the company paying the dividend is held by the recipient company;

b) 10%, in other cases

10%[Note1]

10%

No separate provision

Tajikistan

a) 5%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;

b) 10%, in other cases

10%[Note1]

10%

No separate provision

Tanzania

5%****, 10%

10%

10%

No separate provision

Thailand

10%

10% [Note1]

10%

No separate provision

Trinidad and Tobago

10%

10% [Note1]

10%

10%

Turkey

15%

a) 10% if loan is granted by a bank, etc.;

b) 15% in other cases

[Note1]

15%

15%

Turkmenistan

10%

10% [Note1]

10%

10%

Uganda

10%

10%[Note1]

10%

10%

Ukraine

a) 10%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;

b) 15%, in other cases

10% [Note1]

10%

10%

United Arab Emirates

10%

a) 5% if loan is granted by a bank/similar financial institute;

b) 12.5%, in other cases

10%

No separate provision

United Mexican States

10%

10% [Note1]

10%

10%

United Kingdom

15%/10%

(Note 4)

a) 10%, if interest is paid to a bank;

b) 15%, in other cases

[Note1]

10%/15%[Note 2]

10%/15%[Note 2]

United States

a) 15%, if at least 10% of the voting stock of the company paying the dividend is held by the recipient company;

b) 25% in other cases

a) 10% if loan is granted by a bank/similar institute including insurance company;

b) 15% for others

10%/15%[Note 2]

10%/15%[Note 2]

Uruguay

5%

10% [Note1]

10%

10%

Uzbekistan

10%

10% [Note1]

10%

10%

Vietnam

10%

10% [Note1]

10%

10%

Zambia

a) 5%, if at least 25% of the shares of the company paying the dividend is held by a recipient company for a period of at least 6 months prior to the date of payment of the dividend;

b) 15% in other cases

10% [Note1]

10%

10%

*If the beneficial owner is a company (other than a partnership) which holds directly at least 10 percent of the capital of the company paying the dividends.

**5% if the beneficial owner of shares is a company and it holds at least 10% of shares of the company paying the dividends.

*** if the beneficial owner is a company that, for an uninterrupted period of two fiscal years prior to the payment of the dividend, owns directly at least 25 per cent of the capital stock of the company paying the dividends.

****5% if the recipient company owns at least 25% share in the company paying the dividend.

1. Dividend/interest earned by the Government and certain specified institutions, inter-alia, Reserve Bank of India is exempt from taxation in the country of source (subject to certain conditions).

2. Royalties and fees for technical services would be taxable in the country of source at the rates prescribed for different categories of royalties and fees for technical services. These rates shall be subject to various conditions and nature of services/royalty for which payment is made. For detailed conditions refer to relevant Double Taxation Avoidance Agreements.

 

3. Royalties and fees for technical services would be taxable in the country of source at the following rates:

  • 10 per cent in case of royalties relating to the payments for the use of, or the right to use, industrial, commercial or scientific equipment;
  • 20 per cent in case of fees for technical services and other royalties.

4. (a) 15 percent of the gross amount of the dividends where those dividends are paid out of income (including gains) derived directly or indirectly from immovable property within the meaning of Article 6 by an investment vehicle which distributes most of this income annually and whose income from such immovable property is exempted from tax;

 

4. (b) 10 percent of the gross amount of the dividends, in all other cases

5. The CBDT has clarified that DTAA signed with the Government of the Czech Republic on the 27th January 1986 continues to be applicable to the residents of the Slovak Republic. [Notification No. 25, dated 23-03-2015]

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Category Income Tax, Other Articles by - Neethi V. Kannanth 



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