TDS on Retainership Fees paid to NRI

I am in a Hotel Industry. Our Company planning to increase aggressive marketing in France by appointing a NRI as per following Terms. 1)Retainer Fee @ €uro600/- Per month.2)Commission on Gross Sales Turnover 6 %. 3) Reimbursement of Office Expenses.

I wish to know the tax implications (TDS ) & other legal issues like FEMA applicable on these. please help me

Replies (1)

Hi,

Out of all the 3 cases for retainership fees ,and commission on gross sales turnover  attracts Nri tds u/sec 195. But for this reimbursement of office expenses there is no need to pay any Tds (since it is there is no income earned ). In this case tds can either paid by grossing up of his payment or can be paid by the company itself. Apart from Tds retainership fees attract service tax under the head Business ancillary services.

Regards,

Jayashree

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