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Witholding Tax Singapore

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Nupur Agarwal

student

24 Points Posted on 30 June 2024

In case of purchase of virtual data room from foreign entity located in Singapore, what should be the witholding rate U/s 195 and relevant DTAA

Replies (2)

Quick Summary

This discussion clarifies withholding tax obligations when purchasing a virtual data room from a Singaporean entity. It explores Section 195 of the Income Tax Act, 1961, and the India-Singapore Double Taxation Avoidance Agreement (DTAA). While the general rate for technical services to non-residents is 40%, the DTAA suggests no withholding tax may be required, especially if the Singaporean entity lacks a Permanent Establishment (PE) in India.

Deepika Dawale

Finance data

54 Points Posted on 01 July 2024

In the absence of a specific DTAA provision, the general withholding tax rate under section 195 of the Income Tax Act, 1961 for payments to non-residents for fees for technical services is 40%. as a general rate

Sejal Kumar Jain

Assistant Manager - Finance

53 Points Posted on 01 July 2024

Based on the facts given, this is to be considered as business receipts for the foreign entity. If the foreign entity has PE in India, then 40% WHT is to be applied. Applying India Singapore DTAA, prima facie no WHT is required.