Direct tax avoidance agreement

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neha (Querist)
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19 December 2014 If an Indian Company is availing Consultancy services from Individual of Switzerland who does not hold PAN as on date, can take the benefit of Article 14 of DTAA with Swiss Confederation stating that the income is chargeable to Tax in Switzerland, hence no liability to deduct tax at source in India?
Please guide me on above topic

Amol S Joglekar

Amol S Joglekar (Expert)
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19 December 2014 Dont get yourself confused with TDS versus TAXABILITY.
Both the activities, although related, are to be tested independent of each other.
Hope you are representing Indian Company.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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20 December 2014 Dear Neha
The section 206AA of Income Tax Act, 1961 overrides provisions of DTAA, therefore for claiming benefits of DTAA pan required compulsory otherwise TDS will be deducted on Higher rate.

neha

neha (Querist)
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23 December 2014 Thank you sir.
Still I want to clarify one more thing, is PAN and TRC both are mandatory for applying DTAA?
If Non-resident beneficiary is holding Tax Residency Certificate, can the beneficial provisions under DTAA be applied as per SEction 90(2)?
Kindly suggest me.

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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23 December 2014 Yes both are compulsory for getting Tax Benefits of DTAA.

neha

neha (Querist)
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24 December 2014 Ok
Thank you for advice.

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