| Question And Answer | |
|---|---|
| Subject: | TDS applicability on remittance to Foreign Branch for Expenses |
| Category: | Income-Tax |
| Querist: | Arun Gupta |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Foreign Branch for Expenses, TDS |
| Date: | November 11, 2022 |
Indian Company is having a Branch in Germany. Indian company remit the fund to German Branch against expenditures & so want to know if there is any TDS obligation under section 195. Refer any case laws.
If the remittance is in the nature of reimbursement of expenses, there would not be any obligation to deduct TDS.
The Hon’ble High Court of Karnataka in the case of Flipkart Internet (P.) Ltd. v. DCIT [2022] 139 taxmann.com 595 (Karnataka) Where assessee made payments to ‘W’, a US based company, which were claimed to be in nature of reimbursement for salaries of seconded employees of ‘W’, in such case assessee would not be barred from invoking provision of section 195(2) for issuance of nil TDS certificate even if assessee was of view that said payments were not taxable.
If a Pvt. Ltd. company is making payment of legal fees directly to a legal consultant who has rendered services to the company’s branch office in Iraq, will there be any TDS liability u/s 195?