Tds for professional fees payment to foreign national

This query is : Resolved

DINESH (Querist)
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02 September 2011 we are making payment form India Pvt. company to a company registered in UK toward Professional fees for services rendered by them to us in India. The foreign company do not have any place of business in India & also it do not have PAN in India.
TDS should be deducted at what rate for payment of professional fees to such foreign company registered in UK.

Yogesh Agarwal

Yogesh Agarwal (Expert)
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02 September 2011 Dear Dinesh

India has entered into tax treaties to avoid double taxation (DTAA) with many under countries. UK is one of among those countries.

SInce the UK company does not have any PE in India and you are paying directly to them a professional fees so TDS provisions attracted. However, rate depends if the DTAA is signed with that country and the what are the provisions in that treaty. The rate of deduction may be taken lower of DTAA or the normal TDS rate prescribed under the section 195.

Even if UK company does not hold PAN it will need to apply for the same, in absence of that section 206AA atracted and TDS to be deducted @20% or the rate prescribed whichever is higher.

you may like to follow the link pasted below:

https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_UK.htm
A

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