My client is a UK company providing consultancy services to a variety of clients all around the world. Certain customers deduct local withholding taxes before making payment. Are these deductions permissible and can my client get a refund or a credit for the foreign tax suffered?
Answer
Under the domestic law of some countries a company may be required to deduct withholding tax from payments to suppliers for the provision of ‘technical services’ in the same way that withholding tax can be deducted on dividends interest and royalties.
Technical services will typically include consultancy architectural work and design fees and can include intra-group management charges. Each country will have its own slightly different view on what amounts to a ‘technical service’.
...
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My client is a UK company providing consultancy services to a variety of clients all around the world. Certain customers deduct local withholding taxes before making payment. Are these deductions permissible and can my client get a refund or a credit for the foreign tax suffered?
Answer
Under the domestic law of some countries a company may be required to deduct withholding tax from payments to suppliers for the provision of ‘technical services’ in the same way that withholding tax can be deducted on dividends interest and royalties.
Technical services will typically include consultancy architectural work and design fees and can include intra-group management charges. Each country will have its own slightly different view on what amounts to a ‘technical service’.
...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
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