Form 15CB - Aspects to be checked by a CA before issuing Form 15CB [phone]

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Form 15CB - Aspects to be checked by a CA before issuing Form 15CB - Withholding Tax from Payments to Non-resident - Procedures - CA Arinjay Jain
FORM 15CB AND FORM 15CA - RELATION
Who can issue form 15CB?
The Chartered Accountant holding valid Certificate of Practice can issue Form 15CB, except in the following cases : -
Who can issue form 15CB?
Further , the Chartered Accountant shall not be :-
1.Any officer or employee of the deductor .
2.Any relative of the person given at Point 2 to 5 .
Himself holding any security or interest in the deductor
Having his relative or partner holding any security or interest in the deuctor of the value above Rs 1 lakh
Himself Indebted to the deductor
3.Having any relative or partner indebted to the deductor for sum exceeding Rs 1 lakh
4.Have given a guarantee or provided any security in connection with indebtness of third person to the deductor
5.Have given any security or guarantee for indebtness of third person to the deductor above Rs 1 lakh
6.Has business relationship with the deductor
7.Have been convicted for a offence involving fraud and a period of 10 years has not expired from the date of conviction .
Purpose of filing form 15CB
In Form 15CB , a Chartered Accountant certifies that : -
He has examined the relevant agreement between payer and non-resident payee requiring the remittance ;
He has examined relevant books of accounts and document for ascertaining the nature of payment to be made to non-resident
He has determined the rate of Withholding tax as per provisions of Section 195(6) .
Documents to be examined by Chartered Accountant for issuing form 15CB
Contract examination - whether a gross up is required for withholding tax ?
Chartered Accountant needs to check the existence of grossing up clause in the service agreement or contract. Existence of grossing-up clause shows that the withholding tax would be borne by the payor .
For example, if the contract is valued at USD 9,000 net of taxes, and WHT rate is 10% , this amount would be grossed up to USD 10,000 (USD 9000/90%) and WHT would be USD 1000 ( USD 10000*10%) USD 10000 .
Sample of grossing-up clause in service agreement is shown as under :-
The contract price does not include any applicable Indian taxes , withholding tax , if any, or other fiscal or para fiscal levies and fees payable in India . All taxes, duties and levies in India have to be paid and borne by XYZ Ltd. (i.e., payor)
How to examine the Service agreement or contract for issuing form 15CB
Check the Nature of services /supplies to determine whether such payment would be considered as Royalty or Fees for Technical Services, or Interest or business income or any other income under the IT Act .
Check the Country of residence of non-resident payee in the agreement and whether India has a DTAA with the Country of non-resident payee .
If there is a DTAA , then taxability of such payment would be as per the DTAA or the IT Act, whichever is more beneficial and results in lower withholding tax rate .
How to check copy of invoice for issuing form 15CB?
Check invoice amount, name of non-resident payee and the date of invoice (for applicable FY for WHT Rate) .
If the contract amount is payable in instalment and has advance component, withholding tax would be computed after considering this aspect.
All invoices raised under a contract should be less than or equal to contract amount.
Form 10F , TRC and NO PE Declaration from Non-Resident
Form 10F , Tax Residency Certificate and No PE Declaration are collected from the non-resident payee in order to give the benefit of the relevant DTAA and determine withholding tax rate as per DTAA .
Period mentioned in Form 10F , TRC and No PE declaration should be the period during which non-resident has rendered services or would provide services .
EXAMPLE :- Suppose the non-resident would provide services during November, 2018 to January 2019. However, Form 10F , TRC and No PE declaration given to non-resident to payor is valid from July 1, 2017 to June 30, 2018 . In such a case , payor is required to obtain new documents from non-resident which would be valid from July 1, 2018 to June 30, 2019 . Else benefit of DTAA would not be available.
Sample copy of form 10F
Sample copy of Tax residency certificate
Sample copy of No PE declaration

[@ca.rajashekargshetty5173]

Very good presentation, I came here to refresh my Knowledge and this video serve the purpose

[@neethuraju1269]

Very useful class sir ❤. But sir please solve the issue of audio.🙏

[@Sortingtax]

Yes we worked on it and the issue is resolved for future videos

[@kirtishah8261]

Do you provide CA services for the Form 15 CB ? Thanks 🙏

[@ranuraje913]

15 CB is required to be issued in case remittance after deduction of equalization levy

[@abhivyaktigarg]

Audio is very low

[@jakkulapraveen422]

LOW VOICE