Foreign payments are an important part of business nowadays and with #Foreign_Payments come increased compliances.
In case of a payment to a foreign vendor, we are required to obtain the documents mentioned below, to analyze the #withholding obligation and withheld taxes before making the payment:
#Form_10F – A declaration given by Non-Residents stating that they are tax resident of a country other than India.
No PE Declaration – A declaration given by Non-Residents stating that they do not have a permanent establishment in India.
Tax Residency Certificate – A Certificate issued to the Non-resident by the Tax Authority of the Country in which it is a resident.
As per notification no.03/2022 dated 16-July-2022, FORM 10F is required to be furnished electronically effective from the date of the notification.
The implication of the above notification is:
#Non_Residents are required to file Form 10F electronically on the Income tax portal.
Non-residents are now required to provide e-filed Form 10F to their customers in India.
Physically signed declarations in Form 10F are no longer valid.
Therefore, going forward every Payer must mandatorily obtain the electronically filed Form 10F before proceeding to make any payments to their foreign vendors.
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