Tax Residency Certificate CA Hiren D Shah Ahmedabad Email: firstname.lastname@example.org
Why Certificate of Residency? • It is noticed that in many instances the taxpayers who are not tax resident of a contracting country do claim benefit under the DTAA entered into by the Government with that country. Thereby, even third party residents claim unintended treaty benefits. Therefore, it is proposed to amend Section 90 and Section 90A of the Act to make submission of Tax Residency Certificate containing prescribed particulars, as a necessary but not sufficient condition for availing benefits of the agreements referred to in these Sections. These amendments accordingly, apply in relation to the assessment year 2013- 14 and subsequent years
What is Tax Residency Certificate? • A certificate issued by the Government of foreign Country or the specified territory which shall contain the following particulars namely • (i). Name of the assessee • (ii). Status ( Individual, company, firm etc..) of the assessee • (iii). Nationality (in case of Individual) • (iv). Country or specified territory of incorporation or registration ( in case of others) • (v). Assessee’s tax identification number or in case no such number, then a unique number on the basis of which the person is identified • (vi). Residential status for the purpose of tax • (vii). Period for which the certificate is applicable • (viii). Address of the applicant for the period for which the certificate is applicable
What are the steps involved? • There has to be an international transaction • An Assessee has to make an application to the AO • An application to AO has to be made in the prescribed Form i.e. Form 10FA • On receipt of the form, AO shall issue a certificate of residence of the assessee in Form 10FB
Questions… • Shall an assesse file Form 10FA for each payee individually? • Will it require to file every year or only once? • Shall it be file also by PE in India for making remittance to HO? • Would an assesse require separate certificate for Holding Company and its subsidiary Company separately?