What is a No PE certificate ?
No PE Certificate is a certificate given by a non resident (NO PE CERTIFICATE FORMAT) can be obtained at the end of this Post., who is deriving any income from India (which could be interest, Fee for Technical Services, Business Income etc., ) , which enables the Indian payor, to with hold tax at a lower rate applicable to a particular income.
Generally, if a non resident derives business income from India, and also has a Permanent Establishment in India, taxes are to be withheld @ 40% of net income of the non resident (plus applicable surcharge and cess). In the absence of details of Expenditure related to the income earned from India, such payments may be liable to tax @ 40% of gross payments, unless the non-resident obtain a lower withholding tax certificate from the Income Tax Department.
Similarly, in case the non resident does not have a permanent establishment in India, the business profits would not be liable to tax in India. In such cases as well, no PE Certificate is required to be obtained by the Indian payor, to apply Nil rate of tax applicable to such payments.
NO PE CERTIFICATE FORMAT – DRAFT VERSION
Name of the Indian party
We refer to the consideration payable to us under the “<<<<<<>>>> Agreement” for <<<<>>>>>>. In this connection , we do hereby confirm as under:
We are a company incorporated under the laws of the <<<>>>> and having our principal office at <<<<<<<<<>>>>> . We are a tax resident of <<<<>>>> under our domestic tax laws with the Tax Identification Number <<<>>>>.
We qualify as tax resident of <<<<>>>>> in terms of the India and <<<<>>>> Tax Treaty for the avoidance of double taxation (“Tax Treaty”) and do not qualify as a “resident” of India under Section 6 of the (Indian) Income Tax Act, 1961. We are, therefore, eligible to invoke the beneficial provisions of the Tax Treaty in respect of any income derived from India for the period <<<<<<<<<<>>>>>>>>>>.
We do not have a PE in India in terms of Article 5 (<<>>) of the India – <<>>> Tax Treaty. In this regard:
- We do not have any office or other fixed place of business in India as envisaged in Article 5 of the Tax Treaty.
- We do not have any dependent agent performing activities in India as envisaged in Article 5(<<>>> ) of the Tax Treaty which may constitute a dependent agency Permanent Establishment for us in India in terms thereof.
In view of the above, we certify that we qualify as a tax resident of the <<<>>> and do not have a ‘Permanent Establishment’ in India under the provisions of Tax Treaty for the period <<<<<<<<<>>>>>>>.
We are the beneficial owner of the consideration receivable under the Agreement mentioned above.
In the event of any change in the above position, we will inform you in writing.
For Name of the Company
Name of person signing the NO PE Certificate
Designation of the Person signing
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