Dear All,
One of my client receive bill from German Resident regarding Technical know how(process) service he provided to my client and now as per treaty, tax rate is 10% and
Income tax rate is also 10% but he doesn't have PAN in India since he does not have any PE in india neither he managed any of his business here directly or indirectly.
As per Rule 37BC read with 206AA, Specified persons are exempted from obtaining PAN in India and by virtue of said provisions, this german resident is eligible to get exemption.
Now, My question is
1)he billed us(client) for EURO 10,000 & he requires full payment so whether my client need to bear TDS by grossing up our payment made to him and will my client get any tax rebate if I paid this TDS @ 10% to government
2) At what rate should my client deduct and paid TDS ( at 20% or at 10%)
3) Whether would my client get any tax rebate if he bears this tax from his pocket?
4) Whether I require to take Form 10F along with TRC from my payee before making this payment?
Please give me valuable suggestion as per act
Thanks
CAclubindia
