09 May 2012
The reply in the below mentioned query would be appreciated :
the query is as under
A company registered in Russia and doing some geological survey work for a company registered in India.
The Indian company mentioning that if the Russian company is having PE in India than Withholding tax would be deducted at 40% and if there is no PE in India of Russian company than the rate of withholding tax would be 10%.
1) Any project office in india whose tenure exceeds 180 days is termed as PE & in that case one has to deduct withholding tax which is normally the maximum rate of tax i.e. 40%.
2) If it is not a PE the we have to deduct withholding tax @ 10% - which is known as FTS (Fee for technical services).
3) Further PE has to file the income tax return & get his accounts audited u/s 44AB (if applicable).
4) Do refer DTAA with Russia : go to link : https://law.incometaxindia.gov.in/DIT/File_opener.aspx?fn=https://law.incometaxindia.gov.in/Directtaxlaws/cbdt/dta/A1_Russia.htm
CAclubindia
