The provided data, reflective of amendments potentially incorporated by the Finance Act, 2025, details the maximum withholding tax (WHT) rates applicable under various Double Taxation Avoidance Agreements (DTAA) between a presumptive source country (likely India, given the structure and inclusion of ‘Fee for Technical Services’) and its treaty partners. This comparative analysis demonstrates significant variations in rates across jurisdictions and income streams, often influenced by the nature of the transaction or the level of equity holding by the recipient.
Dividend Withholding Tax: Equity Holding as a Determining Factor
A prominent pattern across many DTAAs is the tiered WHT rate for dividends, directly correlated with the recipient company’s ownership stake in the company paying the dividend. Lower rates are frequently provided for substantial corporate shareholders, intending to encourage foreign direct investment (FDI) and inter-corporate investment.
For instance, countries such as Bangladesh, Belarus, Croatia, Lithuania, Montenegro, Nepal, Qatar, Serbia, Slovenia, Syrian Arab Republic, Tajikistan, and Zambia offer a reduced rate (often 5% or 10%) if a minimum threshold of equity ownership (typically 10% to 25%) is met. Conversely, portfolio investors, or those not meeting the minimum threshold, are subjected to a higher WHT rate (frequently 15% or more, reaching 25% in the case of the United States and Italy). This structure contrasts with countries like Albania, Armenia, Austria, China, Cyprus, Czech Republic, Estonia, Finland, France, Georgia, Germany, Hungary, Iceland, Indonesia, Iran, Ireland, Israel, Japan, Kazakhstan, Kenya, Korea, Kuwait, Latvia, Luxembourg, Macedonia, Malta, Morocco, Namibia, Netherlands, New Zealand, Norway, Romania, Russian Federation, South Africa, Sudan, Sweden, Swiss Confederation, Trinidad and Tobago, Turkmenistan, Uganda, Uruguay, Uzbekistan, and Vietnam, which maintain a consistent single rate (often 10%) irrespective of the shareholding.
Interest Withholding Tax: Banking Sector Concessions
WHT rates on interest payments generally exhibit less variance than dividends, with a majority of treaties stipulating a 10% rate. However, a recurring concessionary theme emerges where interest paid to specific entities, primarily banks or financial institutions, attracts a lower WHT rate. This is explicitly seen in agreements with Belgium (10% for bank loans), Denmark (10% for bank loans), Philippines (10% for financial institutions), Singapore (10% for bank/similar institutes), Turkey (10% for bank loans), United Arab Emirates (5% for bank/similar financial institutes), United Kingdom (10% for bank interest), and the United States (10% for bank/similar institute interest).
Other countries impose a uniform rate, often 10% (e.g., across much of Europe, Asia, and Africa) or 15% (e.g., Australia, Brazil, Bulgaria, Italy, Mongolia, Poland, Spain). Libya stands out with a 20% WHT rate on interest payments.
Royalty Withholding Tax: Defining “Royalty” and Varying Rates
Royalty WHT rates display significant heterogeneity, with standard rates ranging from 10% to 25%. A 10% rate is common across numerous jurisdictions including Australia, Albania, Armenia, Austria, Bhutan, China, Colombia, Croatia, Cyprus, Czech Republic, Estonia, Ethiopia, Fiji, Finland, France, Georgia, Germany, Hongkong, Hungary, Iceland, Indonesia, Iran, Ireland, Israel, Japan, Kazakhstan, Kenya, Korea, Kuwait, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Montenegro, Morocco, Namibia, Netherlands, New Zealand, Norway, Qatar, Romania, Russian Federation, Serbia, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sudan, Sweden, Swiss Confederation, Syrian Arab Republic, Taipei, Trinidad and Tobago, Turkmenistan, Uganda, Ukraine, Uruguay, Uzbekistan, Vietnam, and Zambia.
Higher rates are noted in treaties with countries like Brazil (25% for trademark use), Bulgaria (up to 20%), Canada (10%-20%), Denmark (20%), Italy (20%), Jordan (20%), and Poland (22.5%). Furthermore, specific definitions of “royalty” under DTAAs, particularly concerning the transfer of software or provision of services related to intellectual property, have historically generated legal disputes.
Fee for Technical Services (FTS) Withholding Tax: Scope Discrepancies
The category for Fees for Technical Services (FTS) is notably absent in several DTAAs, including those with Australia, Bangladesh, Brazil, Greece, Libyan Arab Jamahiriya, Mozambique, Myanmar, Nepal, Philippines, Saudi Arabia, Syrian Arab Republic, Tajikistan, Tanzania, Thailand, and United Arab Emirates, implying that such income is either taxed as business profits if an appropriate nexus exists, or under the domestic law rate of the source country in the absence of a specific treaty provision.
Where FTS is addressed, the rates are generally aligned with the royalty rates, with 10% being the most frequent WHT rate (e.g., Albania, Armenia, Austria, Belgium, Bhutan, Botswana, Colombia, Croatia, Cyprus, Czech Republic, Estonia, Ethiopia, Fiji, Finland, France, Georgia, Germany, Hongkong, Hungary, Iceland, Indonesia, Ireland, Israel, Japan, Kazakhstan, Kenya, Korea, Kuwait, Latvia, Lithuania, Luxembourg, Malaysia, Malta, Montenegro, Morocco, Namibia, Netherlands, New Zealand, Norway, Qatar, Romania, Russian Federation, Serbia, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sudan, Sweden, Swiss Confederation, Taipei, Trinidad and Tobago, Turkmenistan, Uganda, Ukraine, Uruguay, Uzbekistan, Vietnam, and Zambia). Higher rates are found with Belarus, Bulgaria, Canada, Denmark, Italy, Jordan, and Poland.
Judicial Precedents and DTAA Interpretation
The application of WHT rates under DTAAs is frequently subject to judicial review, particularly concerning the interpretation of “Beneficial Ownership,” “Royalty,” and “Fee for Technical Services.”
Beneficial Ownership: Courts have routinely examined the requirement of ‘beneficial ownership’ for claiming lower WHT rates on dividends, interest, and royalties. A key legal principle established is that a mere conduit or an agent receiving income on behalf of another party is not the ‘beneficial owner’ and thus cannot claim treaty benefits. This principle ensures that the treaty benefits accrue to the ultimate recipient of the income, preventing treaty shopping. Judicial scrutiny focuses on whether the recipient has the right to use and enjoy the income and bears the risks associated with it.
Fees for Technical Services (FTS): A significant area of legal contestation revolves around the scope of ‘Fee for Technical Services’ (FTS), often requiring the satisfaction of the ‘make available’ clause in specific DTAAs. The ‘make available’ criterion dictates that a service fee is classified as FTS only if the recipient of the service gains access to or learns the technical knowledge, experience, skill, or process that enables the service recipient to apply the technology themselves without the further assistance of the service provider.
Judicial Interpretation: Courts have often distinguished between a mere provision of service and the imparting of technology. Services like routine maintenance, consultancy, or simple oversight, where no underlying technical knowledge is transferred, have frequently been held not to qualify as FTS under the ‘make available’ clause of various DTAAs, such as those with the US, UK, and Canada. This distinction significantly affects the WHT rate, as income not qualifying as FTS might be taxed as business profits, often resulting in a zero WHT rate in the absence of a Permanent Establishment (PE).
Withholding tax rates*
| Country | Dividend | Interest | Royalty | Fee for Technical Services |
| Albania | 10% | 10% | 10% | 10% |
| Armenia | 10% | 10% | 10% | 10% |
| Australia | 15% | 15% | 10%/15% | No separate provision |
| Austria | 10% | 10% | 10% | 10% |
| Bangladesh | a) 10% (if at least 10% of the capital of the company paying the dividend is held by the recipient company);
b) 15% in all other cases |
10% | 10% | No separate provision |
| Belarus | a) 10%, if paid to a company holding 25% shares;
b) 15%, in all other cases |
10% | 15% | 15% |
| Belgium | 15% | 15% (10% if loan is granted by a bank) | 10% | 10% |
| Bhutan | 10% | 10% | 10% | 10% |
| Botswana | a) 7.5%, if shareholder is a company and holds at least 25% shares in the investee-company;
b) 10%, in all other cases |
10% | 10% | 10% |
| Brazil | 15% | 15% | a) 25% for use of trademark;
b) 15% for others |
No separate provision |
| Bulgaria | 15% | 15% | a) 15% of royalty relating to literary, artistic, scientific works other than films or tapes used for radio or television broadcasting;
b) 20%, in other cases |
20% |
| Canada | a) 15%, if at least 10% of the voting powers in the company, paying the dividends, is controlled by the recipient company;
b) 25%, in other cases |
15% | 10%-20% | 10%-20% |
| China | 10% | 10% | 10% | 10% |
| Columbia | 5% | 10% | 10% | 10% |
| Croatia | a) 5% (if at least 10% of the capital of the company paying the dividend is held by the recipient company);
b) 15% in all other cases |
10% | 10% | 10% |
| Cyprus | 10% | 10% | 10% | 10% |
| Czech Republic | 10% | 10% | 10% | 10% |
| Denmark | a) 15%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;
b) 25%, in other cases |
a) 10% if loan is granted by bank;
b) 15% for others |
20% | 20% |
| Estonia | 10% | 10% | 10% | 10% |
| Ethiopia | 7.5% | 10% | 10% | 10% |
| Finland | 10% | 10% | 10% | 10% |
| Fiji | 5% | 10% | 10% | 10% |
| France | 10% | 10% | 10% | 10% |
| Georgia | 10% | 10% | 10% | 10% |
| Germany | 10% | 10% | 10% | 10% |
| Greece | 20% | 20% | 10% | No separate provision |
| Hongkong | 5% | 10% | 10% | 10% |
| Hungary | 10% | 10% | 10% | 10% |
| Indonesia | 10% | 10% | 10% | 10% |
| Iceland | 10% | 10% | 10% | 10% |
| Iran | 10% | 10% | 10% | 10% |
| Ireland | 10% | 10% | 10% | 10% |
| Israel | 10% | 10% | 10% | 10% |
| Italy | a) 15% if at least 10% of the shares of the company paying dividend is beneficially owned by the recipient company;
b) 25% in other cases |
15% | 20% | 20% |
| Japan | 10% | 10% | 10% | 10% |
| Jordan | 10% | 10% | 20% | 20% |
| Kazakhstan | 10% | 10% | 10% | 10% |
| Kenya | 10% | 10% | 10% | 10% |
| Korea | 15% | 10% | 10% | 10% |
| Kuwait | 10% | 10% | 10% | 10% |
| Kyrgyz Republic | 10% | 10% | 15% | 15% |
| Libyan Arab Jamahiriya | 10% | 20% | 20% | No separate provision |
| Latvia | 10% | 10% | 10% | 10% |
| Lithuania | a) 5%, if the beneficial owner is a company (other than a partnership) which holds directly at least 10 per cent of the capital of the company paying the dividends.
b) 15%, in other cases |
10% | 10% | 10% |
| Luxembourg | 10% | 10% | 10% | 10% |
| Malaysia | 5% | 10% | 10% | 10% |
| Malta | 10% | 10% | 10% | 10% |
| Mongolia | 15% | 15% | 15% | 15% |
| Mauritius | a) 5%, if at least 10% of the capital of the company paying the dividend is held by the recipient company;
b) 15%, in other cases |
7.5 | 15% | 10% |
| Montenegro | (a) 5% if the beneficial owner is a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends;
(b) 15% in other cases |
10% | 10% | 10% |
| Myanmar | 5% | 10% | 10% | No separate provision |
| Morocco | 10% | 10% | 10% | 10% |
| Mozambique | 7.5% | 10% | 10% | No separate provision |
| Macedonia | 10% | 10% | 10% | 10% |
| Namibia | 10% | 10% | 10% | 10% |
| Nepal | (a) 5% if the beneficial owner is a company which owns at least 10 per cent of the shares of the company paying the dividends;
(b) 15% in all other cases. |
10% | 15% | No separate provision |
| Netherlands | 10% | 10% | 10% | 10% |
| New Zealand | 15% | 10% | 10% | 10% |
| Norway | 10% | 10% | 10% | 10% |
| Oman | a) 10%, if at least 10% of shares are held by the recipient company;
b) 12.5%, in other cases |
10% | 15% | 15% |
| Philippines | a) 15%, if at least 10% of the shares of the company paying the dividend is held by the recipient company;
b) 20%, in other cases |
a) 10%, if interest is received by a financial institution or insurance company;
b) 15% in other case |
15% if it is payable in pursuance of any collaboration agreement approved by the Government of India | No separate provision |
| Poland | 15% | 15% | 22.5% | 22.5% |
| Portuguese Republic | 10%/15% | 10% | 10% | 10% |
| Qatar | a) 5% if the beneficial owner is a company which owns at least ten per cent of the shares of the company paying the dividend; and
b) 10% in all other cases. |
10% | 10% | 10% |
| Romania | 10% | 10% | 10% | 10% |
| Russian Federation | 10% | 10% | 10% | 10% |
| Saudi Arabia | 5% | 10% | 10% | No separate provision |
| Serbia | a) 5%, if recipient is company and holds 25% shares;
b) 15%, in any other case |
10% | 10% | 10% |
| Singapore | a) 10%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;
b) 15%, in other cases |
a) 10%, if loan is granted by a bank or similar institute including an insurance company;
b) 15%, in all other cases |
10% | 10% |
| Slovenia | a) 5% if the beneficial owner is a company which owns at least ten per cent of the shares of the company paying the dividend; and
b) 15% in all other cases. |
10% | 10% | 10% |
| South Africa | 10% | 10% | 10% | 10% |
| Spain | 15% | 15% | 10% | 10% |
| Sri Lanka | 7.5% | 10% | 10% | 10% |
| Sudan | 10% | 10% | 10% | 10% |
| Sweden | 10% | 10% | 10% | 10% |
| Swiss Confederation | 10% | 10% | 10% | 10% |
| Syrian Arab Republic | a) 5%, if at least 10% of the shares of the company paying the dividend is held by the recipient company;
b) 10%, in other cases |
10% | 10% | No separate provision |
| Taipei | 12.5% | 10% | 10% | 10% |
| Tajikistan | a) 5%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;
b) 10%, in other cases |
10% | 10% | No separate provision |
| Tanzania | 10% (5% if shareholder is a company and holds 25% shares) | 10% | 10% | No separate provision |
| Thailand | 10% | 10% | 10% | No separate provision |
| Trinidad and Tobago | 10% | 10% | 10% | 10% |
| Turkey | 15% | a) 10% if loan is granted by a bank, etc.;
b) 15% in other cases |
15% | 15% |
| Turkmenistan | 10% | 10% | 10% | 10% |
| Uganda | 10% | 10% | 10% | 10% |
| Ukraine | a) 10%, if at least 25% of the shares of the company paying the dividend is held by the recipient company;
b) 15%, in other cases |
10% | 10% | 10% |
| United Arab Emirates | 10% | a) 5% if loan is granted by a bank/similar financial institute;
b) 12.5%, in other cases |
10% | No separate provision |
| United Arab Republic (EGPT) | 10%/20% [Note 1] | 20%[Note 1] | 20%[Note 1] | No separate provision |
| United Mexican States | 10% | 10% | 10% | 10% |
| United Kingdom | 15%/10%
(Note 4) |
a) 10%, if interest is paid to a bank;
b) 15%, in other cases Rs. |
10%/15% | 10%/15% |
| United States | a) 15%, if at least 10% of the voting stock of the company paying the dividend is held by the recipient company;
b) 25% in other cases |
a) 10% if loan is granted by a bank/similar institute including insurance company;
b) 15% for others |
10%/15% | 10%/15% |
| Uruguay | 5% | 10% | 10% | 10% |
| Uzbekistan | 10% | 10% | 10% | 10% |
| Vietnam | 10% | 10% | 10% | 10% |
| Zambia | a) 5%, if at least 25% of the shares of the company paying the dividend is held by a recipient company for a period of at least 6 months prior to the date of payment of the dividend;
b) 15% in other cases |
10% | 10% | 10% |
Note 1. Articles 11, 12 and 13 of the India-UAR (Egypt) treaty don’t provide withholding tax rates in respect of dividend, interest and royalty payments. Thus, the tax shall be withheld as per rates applicable under the Income-tax Act 1961.
[As amended by Finance Act, 2025]
(Republished with amendments)
Dear Sir/Madam,
We are looking for consultancy regarding Withholding Taxes from ISRAEL to different countries.
Please reach me on Mob : 00971-50-7343340.
Will you be able to share the Article number for Salary in the DTAA between India and UK. I have gone thru the withholding tax rates also, but there is no column for Salary as such. Will you be able to guide.
Is there any rate change or what is the TDS rate for Capital Gains in Hong Kong
While importing fabrics from china to India what rate of TDS is applicable for Handling, Shipping Charges, VGM and manifest Charges. Article 8 is applicable is it correct.?
i want to make payment of tuition fees to Singapore. What will be the tds and what documents do I need
What are the TDS rate, surcharge and cess as per DTAA between India and Canada?
I have paid certain sum to a Canada Based NRI during in Sept,2019 towards purchase of a residential flat but did not TDS. I can avail the facility of 26A as provided under 1st Proviso to Section 201(1A) which is applicable ( w.e.f 1st Sept 2019) in case of a NRI payee. I have to calculate interest on the TDS which was deductible in Sept,2019. What are the TDS rate, surcharge and cess as per DTAA between India and Canada?
Recently ahmedabad cit has given order in the case of Chowgule brothers and Ito gandhidham, and dismissed the appeal on grounds not actually the case order was given.
it has taken consideration that DTAA between India and Spore is available only if the tax is paid at one place. T4 the data benefit to the company LACAY SHIPPING, SINGAPORE was denied. can u pls advise if the appeal order is correct or wrong. and if agreed we need to further deeply get discussion on this singapore dtaa matter because 70% of the shipping is operated from singapore. such orders can have a huge impact in the shipping biz.
Whether on-line advertisement(OIDR-Services provider is NRI company) is liable for wHT while making payment? What if payment is made through pre-paid card payment. Pls clarify
One lady received a Thailand Company’s shares from her Mother by way of gift. Which was purchased by her father around 40 years back and after his death the shares recd. by her mother. She got dividend after deduction of TDS from Thailand. So, what would be the tax applicable here in India and how to show it in Income Tax Return? Please guide.
Sir,
My son-in -law, working in Bengaluru for a Germany based company held shares of that company on the basis of a scheme like “70% of purchase price met by the employee and 30% by the company”.
The share is listed in a German stock exchange.
In June 2019 he sold the shares after holding for more than 8 years. Please enlighten me on how the capital gains from this stock sale will be treated for income tax in India, under the Indo -German DTAA.(please note that he is residentof India).
Regards.
MK Nair.
Dear Sir What is the rate of TDS if technical services received from Australia 10% or 15% services received for industrial purpose in Article no 12 3(d) please suggest
rate of tds on sale procceds of property as per dtaa with zambia
can i get the same chart for Singapore as well ?
rate of with holding tax for technical services between india and uae
and between india and saudi arabia for technical services
What is the rate of withholding tax between india and UAE and saudi arabia
As per revised DTTA with Kenya dated 19-02-2018, withholding tax on Fee for Technical Services is 10% instead of 17.5%
Hi,
I wanted know about tax rate b/w India & Singapore, Specifically Service Charges of Training Expense & Professional Charges , Singapore company don’t have INDIA PAN, TRC 10F in this case please advice tax rate
Royalties in Malaysia Country as per DTAA deducted 10%.
PAN Number of Foreign Party is require?
sir, annual membership fees paid to Switzerland, whether TDS is applicable for this remittance. if not what are the relevant article of DTAA
PLZ ADVISE
WHAT IS THE WITHHOLDING TAX RATE FOR AY 16-17 FOR TECHNICAL KNOW HOW FEES PAYABLE TO GERMANY THEY DON’T HAVE PE IN INDIA
RGDS
Percentage of Withholding tax against Royalty payment to Hong Kong company before 1st April`2015 and after 1st April`2015.
Please revert back urgently.
Sir, IF 115-O IS APPLICABLE PLEASE SUGGEST THE RATES FOR THE COMPANY
SUGGEST ALL TRIBUNALS NEED TO FOLLOW IN THE INTEREST OF JUSTICE, ELSE PEOPLE WOULD LOSE CONFIDENCE ON TRIBUNALS,AND THE PEOPLE WOULD GO TO THE HIGH COURTS UNDER ART 226 OR ART 32.. SO HOPE HON TRIBUNALS HONORABLY FOLLOW STRICTLY THR PRINCIPLES OF NATURAL JUSTICE AND RULE OF LAW WHICH ARE PRIMARY REQUIREMENT IN ANY COUNTRY.
thnx for sharing….
good advisory. thanks