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Query: Double Taxation Avoidance Agreement (DTAA) between India and Taiwan?

07 February 2024

Hello,

I'm inquiring about the Double Taxation Avoidance Agreement (DTAA) between India and Taiwan. I need to make a payment for technical services to a Taiwanese party and wonder if they can benefit from this treaty. However, upon my research, I found a treaty between specified associations instead of the governments of both countries. Can we still avail the benefits of DTAA in this case? Any insights would be appreciated. Additionally, if anyone has information on the specified associations mentioned on the income tax website, that would be helpful too.

Thank you

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7 Replies

Saravanan nagaraj (463 Points)
Replied 07 February 2024

DTTA, double taxation on employment. If you recruited an employee India, now he/she works for you in outside of india. This DTTA will be applicable u/s 89, 90,90a &91.

When you make payment to technical services to other country peoples. It is considered as Import of services. TDS deduction also not applicable.

This is what I understand from your question. All government is not directly registered themself into taxation. Because, it is government department not a business entity. They usually form an association(corporation) or business registration to deal with all kinds of taxation. India had signed double taxation agreement between 85 countries.

Please refer these sec.89,90,90a&91.

Suraj Rawat (6 Points)
Replied 09 February 2024

Dear sirs,

thank you for your reply but payment to non residence for professional or technical services are covered under Fee for technical services and it is deemed to accrue or arise in India as per 9(i)(vii) and hence taxable in India. My doubt is whether any Taiwan's party can claim benefit of DTAA ? I can find only a treaty between the Specified associations of India and Taiwan.

Saravanan nagaraj (463 Points)
Replied 10 February 2024

Payment to foreign people will not fall under this Income Tax section and clause 9(i)(vii).

You are making payments to foreigners, not indian citizen who are now NRI or OCI.

For technical and professional service, you should deduct TDS, if they are your employees or freelancer in India. In this case, they are not your employees and also not citizen of this country.

In the recent article and judgement regarding TDS not deducted by Assessee. It was taken security by AO. Appellate tirbunel gave favour judgement to Assessee.

as per 9(i)(vii) , it is not applicable in your case. Please consult with your Tax Accountant or Chartered Accountant.

Thanks 🙏

sabyasachi mukherjee (26073 Points)
Replied 11 February 2024

Dttaa is a very vast chapter.

Suraj Rawat (6 Points)
Replied 12 February 2024

(Please read Sec 9(i)(vii) and explanation to section 9(i)(vii))

(vii) income by way of fees for technical services payable by—

(a) the Government ; or

(b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person¹⁴ outside India or for the purposes of making or earning any income from any source outside India¹³ ; or

(c) a person who is a non-resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning any income from any source in India :

Explanation.—For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,—

(i) the non-resident has a residence or place of business or business connection in India; or

(ii) the non-resident has rendered services in India

Saravanan nagaraj (463 Points)
Replied 12 February 2024

I hope you are discussing about Taiwan people who works for you outside of India.

This section and clauses talking about Non-resident not about foreigners.

Non-resident Indian' is an individual who is a citizen of India or a person of Indian origin and who is not a resident of India.

VIRAAJ VASHISHTH (81 Points)
Replied 01 March 2024

Reclaiming Your Tax Savings: Revising Your Claim for DTAA Benefits

Have you missed claiming Double Taxation Avoidance Agreement (DTAA) benefits on your income tax return? Don't fret! Revising your claim is possible, offering a second chance to optimize your tax situation. This article explains the ins and outs of revising your DTAA claim, empowering you to navigate the process confidently.

When Does Revision Make Sense?

Revising your claim can be beneficial in various situations:

1. Overlooked Exemptions: If you were unaware of applicable DTAA provisions at the time of filing, the revision allows you to claim the rightful exemption or reduced tax rate.

2. Incorrect Calculations: Did you miss applying the DTAA tax rate or use the wrong exchange rate? Revising your claim rectifies these errors and adjusts your tax liability accordingly....

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