Govt. Notifies Lower Royalty & FTS Tax-Rate In India-Spain DTAA
Mariya Paliwala
21 March 2024 9:52 AM GMT
The government has notified the lower tax rates on royalties and fees for technical services (FTS) in the India-Spain double taxation avoidance agreement (DTAA).As per the notification, royalties and fees for technical services may also be taxed in the contracting state in which they arise, according to the law of that state, but if the recipient is the beneficial owner of the royalties or...
The government has notified the lower tax rates on royalties and fees for technical services (FTS) in the India-Spain double taxation avoidance agreement (DTAA).
As per the notification, royalties and fees for technical services may also be taxed in the contracting state in which they arise, according to the law of that state, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed 10 percent of the gross amount of royalties or fees for technical services.
The Convention between the Government of the Republic of India and the Kingdom of Spain for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital came into force on January 12, 1995. After the notification by both contracting states to each other of the completion of the procedures required under their laws for bringing into force the Convention.
The Convention provides that if under any Convention or Agreement between India and a third state, which is a Member of the Organisation for Economic Cooperation and Development, which enters into force after January 1, 1990, India limits its taxation at source on royalties or fees for technical services to a rate lower than the rate provided for in this Convention on the said items of income, the same rate as provided for in that Convention or Agreement on the said items of income shall also apply under this Convention.
“In the Convention between India and Germany, which entered into force on October 26, 1996, and Germany was a member of the Organisation for Economic Co-operation and Development at the time of entering into the Convention with India, the Government of India has limited the taxation at source on royalties and fees for technical services to a rate lower than that provided in the Convention between India and Spain on the said items of income,” the notification read.
Notification No. 33/2024
Click Here To Read Notification
