Online Form 10F, PAN and No PE Declaration in India

Demystifying Online Form 10F : A Comprehensive Guide for Form 10F Filing and getting paid from Indian customers

I. Introduction and Understanding Form 10F

A. Explanation of Form 10F

Form 10F, is a declaration from the non resident, wherein they provide certain data , which helps the Indian payor to ascertain, whether they are liable to the benefit of the Indian Tax Treaty, which can help non-resident claim a lower withholding tax in India. This is also a mandatory document, before the funds can be remitted from India and therefore its important to understand how to file Form 10F.

B. Importance of Form 10F for International Transactions and Who Needs to File

Whenever an Indian payor, makes payment to non resident, they are required to obtain a declaration in Form 10 F from the non-resident. In the absence of such declaration, the Indian customer is unable to make the payment to the non resident .

Form 10F needs to be filed by the non-resident recipient , online . They can file Form 10F under two scenarios - (a) With PAN route (b) Without PAN route. PAN here refers to Permanent Account Number, which is the Tax identification number in India.

C. Purpose and Key benefits of the Article on Online Form 10F

The purpose of the article is to outline, the requirement for online Form 10F, the alternative ways in which a non-resident can submit Form 10F, and how we, at Sorting Tax can help the non resident to file Form 10F and resolve issues arising out of such filing .

Form 10F, which is required to be filed online, helps a non resident to : -

• Claim non taxability of an income in India ; or
• Claim lower tax rate on an income in India ; or
• Avoid Double Taxation of same income.

Form 10F also assist the Indian tax office in obtaining a streamlined data on International Transactions, and the amount of tax withheld on such payments. Depending on a case to case basis, the Tax office can select payments to check if the tax has been withheld properly.

To know more about our services on the online Filing of Form 10F (with or without PAN number), No PE Declaration and PAN Number - Contact us Today

II. Key Components and Information Required

In Form 10F, and non-resident is required to declaration, in which it provides the following information : -

• Name of the non -resident ;
• Whether the non-resident is a tax resident of the country, with whom the Treaty benefit is claimed
• Tax identification number of the non -resident in their home country
• Whether they have obtained Tax Residency certificate from their home country of residence .

In October 2023, the Indian Government made it mandatory to file Form 10F online. Such a Form can be filed by NR, who fall under either of the following categories : -

• Non -resident, who have a PAN number or who are required to obtain the PAN number
• Non resident, who do not have a PAN number and who are not required to obtain the PAN number.

The process in case the non resident is required to obtain a PAN number, takes 15-20 working days, as it requires certain document to be apostilled in the home country of the non resident.

III. How Form 10F Impacts Non-resident

A delay in filing online Form 10F, can result in the delayed payment by the Indian Company. Therefore it is very important for, a non resident to file online Form 10F correctly.

Challenges faced in Filing Form 10F

The most common challenges faced by a non-resident is to ascertain whether they are required to obtain a PAN number or not, which itself is the governed by Income Tax regulations. Therefore it is important that, professional advise is timely sought, so as to avoid Inaccurate or Incomplete Information. The general consensus is that the non-resident who claim reduced rate of tax / non-taxability of income are required to obtain PAN number, even if they do not have one. But many a times companies take aggressive views of not obtaining a PAN and filing Form 10F under non-PAN route.

To know more about our services on the online Filing of Form 10F (with or without PAN number), No PE Declaration and PAN Number - Contact us Today

Strategies for Successful Form 10F Filing

In order to file Form 10F, it is important for the non resident to ascertain the following : -

• Whether they qualify as a tax resident of the country with which India has entered into a tax treaty ?
• Whether they have a tax residence certificate issued by their local country of residence ?
• Do they have a PAN number in India or are they required to obtain one such number ?
• Would claiming Treaty benefit result in a tax advantage to them ?
• Do they have access to Tax Professionals and Consultants , who can guide them to take the correct decision

Filing form 10F for Financial Year 2024-25

IV . Case Studies and Examples

A Singapore company providing consulting services claimed 0% tax by obtaining PAN and claiming benefit of "make available" clause

One of the Foreign companies , who were tax resident of Singapore , approached us to prepare an online Form 10F for them. The company did not had a PAN number, but had obtained TRC from the Singapore Government. They were providing certain Consultancy Services, which did not "make available" technical knowledge, skill etc, within the meaning of India Singapore treaty. Until now, they were paying a tax of 20% + by way of TDS.

Our Solution

We assisted the foreign company to obtain a PAN number, and file Form 10F online. This not only help them to lower the with holding tax to 0%, they were also able to obtain a refund of the excess taxes that were withheld from their payments, earlier during the year by the Indian customer.

A US company filed Form 10F under non-PAN route

A US company had been trying to file online Form 10F by themselves but had issues with a OTP on mobile number .

Our Solution

We assisted the foreign company to file online Form 10F by resolving the issues through alternate route, that permitted interaction with tax office .

To know more about our services on the online Filing of Form 10F (with or without PAN number), No PE Declaration and PAN Number - Contact us Today

V. Conclusion

To summarise, the importance of Form 10F cannot be under estimated, as it can result in delay of payment, as well as, incurring higher amount of withholding tax. To file this form effectively, it is important to seek proper professional help.

In case you would like to obtain our assistance, on the online Filing of Form 10F (with or without PAN number), No PE Declaration and PAN Number - Contact us Today or write to us at [email protected]

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