Tds from overseas subsidary

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This query is : Resolved

Sudhanshu Bhasin (Querist)

14 May 2013 Our company extended a loan of $ 50K to its WOS (Wholey Owned Subsidiary) in the United Kingdom

What interest rate can we charge as limit to charge the company
We plan to charge @ 20%

Also if UK company is to pay Interest, does it also have to charge TDS before paying the TDS

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

15 May 2013 I hope that loan is within the limits prescribed under FEMA.

Indian tax authorities would be happy to have 20% interest from UK subsidiary but UK tax authorities may have issue on the same in your UK tax assessment .

The withholding under UK laws needs to be checked from a UK consultant.

Anuj
Femaquery@gmail.com

Sudhanshu Bhasin

Sudhanshu Bhasin (Querist)

15 May 2013 What are the prescribed limits of FEMA
and where can we check and verify the details

We have Loaned the Subsidiary as no bank in the UK were allowing Credit / Overdraft to new companies, therefore we had to Loan the Subsidiary

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