Impact on Foreign Companies - Recent Change in Withholding Tax Rate

Nexdigm and Taxsutra recently co-hosted a webinar to address the impact, implications, and challenges that the changes in Section 115A will induce on Withholding Taxes on foreign payments.

Speakers Maulik Doshi, Deputy Managing Director, Transfer Pricing, and Nishit Parikh, Director, International Tax and MA Tax, spoke at length about the critical points one must consider before seeking tax-treaty benefits. They also highlighted the significance of mandatory compliance tests, such as the Principal Purpose Test (PPT) and the Simplified Limitation of Benefits Test (SLOB) under the Multilateral Instruments (MLIs) and how they can help one in seeking extended tax-treaty benefits.

Besides this, the experts drew attention to the important documents such as Tax Residence Certificate, Form 10F, and NO PE declaration, which one must procure to avail and enjoy tax-treaty benefits.

Furthermore, the experts summarized the tax rates applicable to Royalty and FTS payments in various scenarios and the important measures from a taxpayer's perspective to overcome complications of Withholding Tax Rates confidently.