TDS on Foreign Payment directly on Website

Whether TDS is applicable on any payment made online to a Foreign Vendor. Vendor is an online website for "Importer search Engine" where you can search for potential customers for exports to different countries.

Whether TDS is applicable on such online foreign payment done on website directly.

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Quick Summary
This discussion explores whether Tax Deducted at Source (TDS) is applicable on online payments made to foreign vendors, specifically for services like an "Importer search engine" accessed directly on their website. The initial view is that TDS may not be applicable if the services are rendered outside India and by analogy to payments made to foreign entities like Google for SEO activities. However, it's noted that TDS under Section 195 is generally required for payments to non-residents if the income is considered business income and the non-resident has a business connection or permanent establishment in India, or if the payment is treated as Fees for Technical Services (FTS).

In my view no TDS applicable. as the services are provided by the foreign vendor out of India. Next is we do not deduct tds of we pay in India to Google for SEO activity. let me know if i am wrong. 

 

 

If the payment is in the nature of Business income of NR recipient, it requires a TDS only when the NR recipient has a Business Connection/Permanent Establishment (PE) in India. However if the payment is treated as FTS then regardless of the Permanent Establishment in India, a TDS is required u/s. 195

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