We, an Indian company , are getting Commercial loan from abroad, a foreign company, having no establishment in India, is liaisoning for it for a service fee . Will we have deduct tax for that service fee ? Please suggest and oblige.
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Taxation of a foreign company for services rendered abroad
Replies (2)
hi
The Indian company needs to deduct TDS on the SErvice Fees if the loan so raised is utilized / affects the business operations of the Indian Company in India.
However one also needs to check the definition of "Fees of Technical Services" in the respective DTAA between India and the country of Residence of Foreign Company, if any. If one gets the exemption from the definition as per DTAA, then there would be no liability on the part of Indian Company to deduct TDS on Service Fees.
I hope that the loan being taken from abroad is as per the FEMA guidelines on ECB.
Anuj
femaquery @ gmail.com
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