To explain things in simple terms, there are plenty of occasions where domestic companies in India, or foreign companies with their establishments in India render services to a client. Now, these services are of course chargeable and liable to certain amount of tax withholding.
Assuming that the services rendered call for a tax withholding of 30%, the payer (the person/company availing the services) must pay the balance amount to the company giving the services. Consequently, the taxable amount is given to the tax authorities and the company providing the services must opt for a tax credit and consequent, tax refunds, a process which is relatively long an arduous, in order to get its due amount.
This tax liability has the propensity to create various issues on the side of the service provider.
The primary problems which arise via this regime are simple:
In order to mitigate these challenges, the mechanism of lower withholding tax certificate exists, which are provided to those companies which can justify with due reason that the computable and valid tax rate applicable for it is relatively lower than the prescribed tax rate for the company.
Be it assisting companies in terms of maintaining their balance sheets (since the certificate requires a 4/3-year financial statements record; not for new companies), analyzing its projections, realizing the clause mismatches and solving them for the companies applying for the certificate, Coinmen undertakes everything ranging from number crunching to negotiation for the clientele via representation in front of tax authorities.
The process of filing, which starts from filing Form 13 or Form 15E in certain cases is also duly assisted, where the complete documentation and filing steps till the application reaches the assessing officer is undertaken by the firm.
To know more about the nuances of lower withholding tax certificate, its process, and the kind of pre-requisite requirements it needs in terms of appropriate documentationDownload PDF
Co-Founder and Partner
Experience: 15+ years
Specializes in Transfer Pricing Former Manager, EY India (TRS)