No pe certifcated and trc period

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Prashant (Querist)
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23 February 2016 We have one vendor which is based in Australia. We have received No PE Certificate and Tax Residency certificate for the year 2015
We received one invoice related to services received for Nov 15 and Dec 15 which we booked in Jan 16.
Therefore just wanted to know whether the certificate for 2015 are still good enough for the above invoices or we need to obtain the fresh certificate for 2016 to process the invoices of Nov and Dec 15
Since we booked the invoices in Jan 16, we are advised to take the certificates for 2016 and certificate of 2015 will not be held good
Please advise and clarify the doubt

Prashant

Prashant (Querist)
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03 March 2016 Guys can anyone help me with the advice

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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04 August 2024 ### Understanding the Validity of No PE Certificate and Tax Residency Certificate

**1. ** **Certificates for Tax Relief under Double Taxation Avoidance Agreement (DTAA):**
- **No PE Certificate**: This certificate confirms that the vendor does not have a Permanent Establishment (PE) in India, which means they are not liable to pay tax in India under the domestic tax laws.
- **Tax Residency Certificate (TRC)**: This certificate confirms that the vendor is a tax resident of the country in which they claim residency. It helps in claiming tax relief under the DTAA.

**2. ** **Relevance of Certificate Dates:**
- **For the Period of Service Received**: Typically, the certificates provided are valid for the calendar year in which they are issued. Therefore, if services were received in November and December 2015, you need to ensure that the certificates cover the year 2015.
- **Booking Date vs. Service Date**: The key factor is the service period, not the invoice booking date. The invoice's service period determines the relevant year for which the certificates are required.

**3. ** **Validity of Certificates:**
- **Certificates for 2015**: Since the services were rendered in November and December 2015, certificates for the year 2015 are generally considered valid for these transactions. The certificates should ideally cover the period during which the services were provided.
- **Fresh Certificates for 2016**: You would typically need certificates for the year 2016 if the services were rendered in that year or if there were significant changes in the tax residency status or PE status in that year. However, since the services were provided in 2015, certificates from 2015 should suffice.

**4. ** **Practical Considerations:**
- **Compliance**: If the vendor has provided certificates for 2015, these should be acceptable for processing invoices related to the 2015 service period. Ensure these certificates are valid and accurately reflect the vendor's status.
- **Internal Policies**: Some organizations or tax authorities may require more recent certificates or may have specific policies. If in doubt, verify with the tax consultant or financial advisor on your company’s compliance requirements.

**5. ** **Action Steps:**
- **Review Certificates**: Confirm that the No PE Certificate and TRC for 2015 are valid and cover the relevant period of the services received.
- **Consult Professionals**: For assurance and compliance with local regulations, consult with your tax advisor or financial consultant to confirm the acceptability of the 2015 certificates and address any specific internal or regulatory requirements.

**Summary:**
For invoices related to services received in November and December 2015, the No PE Certificate and Tax Residency Certificate for 2015 should generally be adequate. The certificates should ideally cover the year during which the services were provided. However, it is always prudent to check with your tax consultant to ensure compliance with any specific requirements or recent updates in regulations.

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