IMPORTANCE OF TAX RESIDENCY CERTIFICATE (TRC) IN NON-RESIDENT PAYMENTS?
Unlock value of Tax Residency Certificate (TRC) in non-resident payments. Explore its crucial role in efficient and compliant cross-border transactions.
Q. 1: What are the Legal provisions on TRC?
Answer:
S. 90(4) – NR cannot avail benefit under Treaty without Tax Residency Certificate (TRC).
S. 90(5) – The assessee has to provide such other details as may be prescribed.
Rule 21AB – specifies the information to be provided in Form 10F – if the same are not covered in the TRC. So, TRC and Form 10F go together. Form 10F alone not enough.
Q. 2: Is TRC enough for claiming the DTA benefit?
Answer:
If special conditions are specifying contrary in DTA – like Beneficial ownership, Limitation of Benefits clause – TRC is not enough.
Q. 3: If TRC is not available at the time of deduction?
Answer:
Practical decision can be taken based on past facts after due diligence. Once the TRC is obtained, the treaty benefit would be available for the whole year.
Q. 4: If the TRC is available, but it is for a different period?
Answer:
The remitter can only rely on the TRC for the period during which the income is earned.
Q. 5: Is TRC required in case tax is not payable under the Act itself?
Answer:
As DTAA provisions are not exercised, provisions of Sections 90(4), 90(5) and the relevant rules will also not be applicable.
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