India Tax Treaties with Taiwan

India has signed Double Taxation Avoidance Agreements (DTAA) with Taiwan.
In India, transactions involving persons having interest between countries with which India has a DTAA, there are agreed rates of tax and jurisdiction on specified types of income.
Therefore, tax relief is provided for those person residents from Taiwan.
Evershine provide Taiwan Parent company to apply for tax relief according to DTAA between India and Taiwan

Email: del4ww@evershinecpa.com
A-16, 1st Floor, Aruna Asaf Ali Marg, Qutub Institutional Area, New Delhi, 110067, India
Deputy Manager Henry Ko  ,  USA Oregon University Bachelor ,speak  in fluent  English. Skype: henryko

Tw-Q-10:

台灣母公司在印度，是否可以依DTA申請沒有常設機構(PE)下零稅率?

Taiwan Parent Company, can apply for zero tax rate without PE under DTA in India?

Tw-A-10:

Yes.
Taiwan has DTA with India, and if India Legal Resident company is without PE (Permanent Establishment), it will be redeemed as “non-India Domestic Sourced Income”.
That means India will levy zero-tax.
However, Taiwan Legal Resident company still needs to send zero-tax application to India Tax Bureau for being approved.

Tw-Q-20:

台灣母公司在印度設立了印度子公司， 台灣母公司替子公司服務收入能否申請零稅率?

When Taiwan Parent Company as an Investor, set up an India subsidiary, and provide services from Taiwan to India Subsidiary, can apply for zero tax rate without PE under DTA in India?

Tw-A-20:

According to DTA Article 5 item 7, A India subsidiary will not be treated as PE of Taiwan Parent company as an investor because it is a separate legal entity.

That means if an India Subsidiary pay a service fee to Taiwan Parent Company through service contract signed between the subsidiary and Taiwan Parent company
as an investor, Taiwan Parent Company can apply zero tax.

As for if the paid amount is reasonable, it will get involved TP (Transfer Pricing) judgment by India Tax Bureau.

Tw-Q-30

印度依DTA沒有PE下零稅率申請的程序為何?
What is the procedure for India to apply for zero tax rate under DTAA without PE?

Tw-A-30

Non-resident in India who wishes to avail treaty benefits are required to furnish the following to the Indian Company (Tax deductor) and they will file to the tax bureau.

1. Tax Residency Certificate (TRC) from the country in which the non-resident is the resident.
2. A No PE declaration letter (prescribed format), to prove the Foreign Company does not have a “PE” in India.

Tw-Q-40

台灣母公司有印度來源所得的各項所得扣繳稅率為何?

When Taiwan Resident company having India domestic sourced income, what are the withholding tax rates for various incomes in India?

Tw-A-40:

Taiwan has DTA with India, and if you are with PE (Permanent Establishment) in India, your income will be considered as India domestic sourced income.
As for levying Tax Rate, please be aware:
if India Tax rate > DTA Rate, adopt DTA Rate; if India Tax rate < DTA Rate, adopt India Rate.

If DTA applied, the DTA rates between Taiwan and India are as below:

*The withholding tax rate under domestic law may apply rather than the treaty rate where the domestic law rate is lower than the treaty rate.

*No tax is imposed on dividends paid to nonresident corporations under Indian domestic law.

Tw-Q-50

當台灣稅務居民有印度來源所得，依DTA優惠稅率申請的程序為何?

When Taiwan Tax Resident having India domestic sourced income, what is India’s application procedure based on the DTA preferential tax rate?

Tw-A-50:

Non-resident in India who wishes to avail treaty benefits are required to furnish the following to the Indian Company (Tax deductor) and they will file to the tax bureau.

1. Tax Residency Certificate (TRC) from the country in which the non-resident is the resident.

Summary of Tax Treaty between India and Taiwan

Taipei Economic and Cultural Center in New Delhi and India-Taipei Association in Taipei concluded and signed an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (Double Taxation Avoidance Agreements, DTAA), on 12 July 2011.

Permanent Establishment

Article 5 states the term permanent establishment (PE) means a fixed place of business which generally includes the followings:

*A place of management

*A branch

*An office

*A factory

*A workshop

*The furnishing of services, includes consultancy services, through employees or other personnel for periods aggregating more than 182 days.

Withholding Tax

*Article 7 of DTAA between India and Taiwan explained, an enterprise shall not be taxed on business profits unless it is attributable to the permanent establishment situated in the relevant territory.

*In the Article 10, dividends paid by an Indian Resident enterprise to Taiwan Resident enterprise (and vice versa), the tax so charged shall not exceeding 12.5% of the gross dividends.

*Article 11 states that where the beneficial owner of the interest (exclude exempted interest) is a non-resident, shall be taxed in the territory in which it arises at the rate not exceeding 10% of the gross interest.

*Article 12 explained royalties means payment for the use of, right to use, copyright of literary, artistic, or scientific work or equipment, information concerning industrial, commercial, or scientific experience.

*Technical services in Article 12 include managerial, technical or consultancy services includes the provision of services of technical or other personnel. Royalties or technical services rendered in an independent capacity should be covered in Article 14 instead. Payment for royalties and technical services are taxed at 10% respectively.

*A professional service or other activities provided by an individual of an independent character as explained in Article 14. India may not tax payments for professional service rendered by a Taiwanese resident unless the Taiwanese resident has a fixed place or stay in India for 183 days or more. An independent profession includes physicians, lawyers, engineers, architects, surgeons, dentists, and accountants.

Elimination of Double Taxation

Article 23 of the DTAA states that double taxation shall be eliminated by allowing tax credit to be made available to the home resident territory. It shall be credited against the tax levied in the first-mentioned territory on that resident. However, the amount of credit shall not exceed the amount of the tax in the first-mentioned territory.

Exchange of Information

Article 26 states that the competent authorities of the territories shall exchange such information (including documents or certified copies of the documents) relevant to the provision of this Agreement.

Please be aware  below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us
New Delhi Evershine BPO Service Limited Corp.
Email: del4ww@evershinecpa.com
A-16, 1st Floor, Aruna Asaf Ali Marg, Qutub Institutional Area, New Delhi, 110067, India
Deputy Manager Henry Ko  ,  USA Oregon University Bachelor ,speak  in fluent  English. Skype: henryko
or
For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4del@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
LinkedIn address: Dale Chen

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(version: 2024/07)

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