Foreign payments are
an important part of our business and with Foreign Payments come compliances.
In case of a payment to any of our foreign vendor from STL India, we are required to obtain the documents mentioned below, to analyze the withholding obligation and withheld taxes before making the payment:
1.
Form 10F – A declaration given by
Non-Residents stating that they are tax resident of a country other than India.
2.
No PE Declaration – A declaration given by
Non-Residents stating that they do not have a permanent establishment in India.
3.
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 the attached
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:
1.
Non-Residents are required to file Form 10F
electronically on the Income tax portal.
2.
Non-residents are now required to provide
e-filed Form 10F to their customers in India.
3.
Physically signed declarations in Form 10F are
no longer valid.
Therefore, going
forward we must mandatorily obtain the electronically filed Form 10F
before proceeding to make any payments to our foreign vendors from STL India
1 comment:
Though it's mandatory the foreign service provider can only comply if it has a PAN. This is also necessary to login into the tax portal. Most of the foreign service provider do not bother to register the PAN. Hence it's quite a nuisance if the other 2 docs (TRC and No PE ) helps us to rely on DTAA
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