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Where Taxpayers and Advisers Meet

Withholding tax on intl payment

records0121
Posts:1
Joined:Sun Mar 05, 2023 9:52 pm
Withholding tax on intl payment

Postby records0121 » Sun Mar 05, 2023 9:54 pm

Hi,

Really looking for assistance / help with this as I can’t find any proper answers online.

I am the director of a UK Limited company and I am a UK resident. I’m expecting a payment from a company based in India however they’re telling me the payment will be subject to a 20% withholding tax. My main concern is the 85% of the money I’ll be receiving will be spent on expenses and therefore will not be profit.

1/ is the company correct in saying the payment will be subject to a withholding tax

2/ is there anyway for me to claim that 20% back immediately as it’ll be needed to cover expenses

3/ is there any way for me to receive the money from India without the withholding tax and then pay the tax when it comes to my annual accounts.

Really sorry if this seems straightforward, just can’t work it out.

Thanks

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: Withholding tax on intl payment

Postby darthblingbling » Mon Mar 06, 2023 9:34 am

You or the company? What is the payment in respect of?

Integraoutsourcing
Posts:10
Joined:Wed Apr 12, 2023 12:55 pm

Re: Withholding tax on intl payment

Postby Integraoutsourcing » Tue May 16, 2023 11:22 am

The Indian company is likely correct that the payment will be subject to a withholding tax. India has a system of withholding taxes on certain types of payments made to non-residents, including payments for services rendered. The rate of withholding tax depends on the nature of the payment, but it can be as high as 20%. The Indian company is responsible for withholding the tax and remitting it to the Indian tax authorities.

Depending on the circumstances, you may be able to claim a refund of the withholding tax. The process for doing so can be complex, and it may take some time to receive the refund. However, if you have a tax liability in India, you may be able to use the withholding tax as a credit against your liability. In any case, you should consult a tax professional for advice on your specific situation.

It is unlikely that you will be able to receive the money from India without the withholding tax being deducted. The Indian company is required by law to withhold the tax, and it is not possible to pay the tax at a later date. However, you may be able to negotiate a higher payment from the Indian company to account for the withholding tax, you should consult a tax professional for advice on your specific situation. Here I recommend integraoutsourcing.co.uk

wamstax
Posts:2018
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Withholding tax on intl payment

Postby wamstax » Tue May 16, 2023 11:48 am

Try looking at HMRC Manuals at the following link for rates etc but you would be best engaging services of someone experienced in dealing with double taxation and overseas taxes between India and UK - not necessarily an accountant (unless has the specialised knowledge) but a specialist tax adviser
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

wamstax
Posts:2018
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Withholding tax on intl payment

Postby wamstax » Tue May 16, 2023 11:49 am

Sorry link omitted now here www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt9552
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

wamstax
Posts:2018
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Withholding tax on intl payment

Postby wamstax » Tue May 16, 2023 11:50 am

Sorry link omitted now here www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt9552
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites


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