TDS on Foreign outward remittance (DTAA is not exist)

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This discussion addresses the complexities of Tax Deducted at Source (TDS) for payments made to a foreign service provider in Cambodia when no Double Taxation Avoidance Agreement (DTAA) exists between India and Cambodia. The user inquires about the applicable TDS rate, considering the absence of PAN and DTAA, and whether a Tax Residency Certificate (TRC) can exempt the service provider from withholding tax. Experts clarify that if the payment isn't for technical services, withholding tax might not apply.

M Sairam

M Sairam (Querist)
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25 February 2021 Dear Experts,
We need to make a payment for Product listing charges to a Foreign service provider who is in Cambodia.
At present, INDIA doesn't have a DTAA agreement with Cambodia. So For TDS deduction Purposes, Shall I consider a Rate Of 20% on the basis of PAN is not available Instead of IT rate or DTAA rate, Whichever Less, Due to DTAA does not exist? If the case, TDS deducted then such service provider does not get the tax credit Then is it Withholding Tax?

Is Tax Residency Certificate (TRC) helps to such service providers to avoid the TDS or withholding deductions & get the full money to the bank account.