TDS on International payments
This query is : Resolved
18 February 2011
1.) We have exported goods to South Africa on which we have to pay commission to our agent which is a foreign company with no business in India.
Also this agent has acted as our consultant for registering our products with Health Ministry in South Africa by preparing data for submission of our products for registration and answering queries raised by the Health Ministry in South Africa. We have agreed to pay consultancy charges for these services rendered in addition to rent for the use of their office.
Q.1) Do we need to deduct Tax at source at the time of remitting commission ?
Q.2) Do we need to deduct Tax at source at the time of remitting consultancy charges and rent ?
Also this agent has acted as our consultant for registering our products with Health Ministry in South Africa by preparing data for submission of our products for registration and answering queries raised by the Health Ministry in South Africa. We have agreed to pay consultancy charges for these services rendered in addition to rent for the use of their office.
Q.1) Do we need to deduct Tax at source at the time of remitting commission ?
Q.2) Do we need to deduct Tax at source at the time of remitting consultancy charges and rent ?
Kapil Gupta
(Expert)
18 February 2011
First find out, whether we have any DTAT with that country. If no then definitely you need to deduct the tax.
If there is some tax treaty with that country then read the provision of the same and accordingly decide. In most of the cases where we have tax treaty with any country, we do not deduct the tax if the entity does not have any permanent establishment in india.
If there is some tax treaty with that country then read the provision of the same and accordingly decide. In most of the cases where we have tax treaty with any country, we do not deduct the tax if the entity does not have any permanent establishment in india.
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