DTAA rates applicable for various countries
An overview of the Double Taxation Avoidance Agreement
What is DTAA in India?
DTAA in India stands for “Double Taxation Avoidance Agreement.” It is a bilateral tax treaty signed between India and another foreign country or jurisdiction. Double Taxation Avoidance Agreements (DTAAs) apply to individuals who are residents of one country and earning income in another. This means that the two countries involved have agreed on how to tax income earned in each country.
The primary purpose of DTAA is to eliminate the possibility of a person or entity being taxed for the same income in India and foreign countries.
Benefits of DTAA
- Lower Taxes Upfront: You might have to pay less tax when tax is taken out of your income (called withholding tax or TDS).
- Tax Credits: You can get credits for taxes you’ve already paid in another country, so you don’t pay twice.
- No Tax in Some Cases: Some DTAA agreements can even mean you don’t pay certain taxes, like capital gains tax.
DTAA Rates
Countries with which India has DTAA
The DTAA between India and other countries are as below. The description of the Note 1, Note 2 Note 3 and Note 4 given in after the table.
Sl No | Country Name | Dividend (not being covered u/s 115-O) | Interest | Royalty | Fee for Technical Services |
1 | Albania | 10% | 10% (Note1) | 10% | 10% |
2 | Armenia | 10% | 10% (Note1) | 10% | 10% |
3 | Australia | 15% | 15% | 10% / 15% (Note 2) | 10% / 15% (Note 2) |
4 | Austria | 10% | 10% (Note1) | 10% | 10% |
5 | 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% (Note1) | 10% | No separate provision |
6 | Belarus | a) 10%, if paid to a company holding 25% shares; b) 15%, in all other cases | 10% (Note1) | 15% | 15% |
7 | Belgium | 10% | 10% (Note1) | 10% | 10% |
8 | Botswana | a) 7.5%, if the shareholder is a company and holds at least 25% of shares in the investee company; b) 10%, in all other cases | 10% (Note1) | 10% | 10% |
9 | Brazil | 15% | 15% (Note 1) | a) 25% for use of the trademark; >b) 15% for others | No separate provision |
10 | Bulgaria | 15% | 15% (Note 1) | 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% |
11 | 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% (Note 1) | 10%-15% | 10%-15% |
12 | China | 10% | 10% (Note 1) | 10% | 10% |
13 | Columbia | 10% | 10% (Note 1) | 10% | 10% |
14 | Czech Republic [Note5] | 10% | 10% (Note 1) | 10% | 10% |
15 | 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 the loan is granted by the bank; b) 15% for others (Note1) | 20% | 20%< |
16 | Estonia | 10% | a) 10% (Note 1) | 10% | 10% |
17 | Ethiopia | 7.5% | 10% (Note 1) | 10% | 10% |
18 | Finland | 10% | 10% (Note1) | 10% | 10% |
19 | Fiji | 5% | 10% (Note1) | 10% | 10% |
20 | France | 10% | 10% (Note1) | 10% | 10% |
21 | Georgia | 10% | 10% (Note1) | 10% | 10% |
22 | Germany | 10% | 10% (Note1) | 10% | 10% |
23 | HongKong | 5% | 10% (Note1) | 10% | 10% |
24 | Hungary | 10% | 10% (Note1) | 10% | 10% |
25 | Indonesia | 10% | 10% (Note1) | 10% | 10% |
26 | Iceland | 10% | 10% (Note1) | 10% | 10% |
27 | Ireland | 10% | 10% (Note1) | 10% | 10% |
28 | Israel | 10% | 10% (Note1) | 10% | 10% |
29 | Italy | a) 15% if at least 10% of the shares of the company paying a dividend is beneficially owned by the recipient company. b) 25% in other cases | 10% (Note1) | 20% | 20% |
30 | Japan | 10% | 10% (Note1) | 10% | 10% |
31 | Jordan | 10% | 10% (Note1) | 20% | 20% |
32 | Kazakhstan | 10% | 10% (Note1) | 10% | 10% |
33 | Kenya | 10% | 10% | 10% | 10% |
34 | Korea | 15% | 10% | 10% | 10% |
35 | Kuwait | 10% (Note1) | 10% | 10% | 10% |
36 | Kyrgyz Republic | 10% | 10% (Note1) | 15% | 15% |
37 | Latvia | 10% | 10% (Note1) | 10% | 10% |
38 | Lithuania | 5%*, 15% | 10% (Note1) | 10% | 10% |
39 | Luxembourg | 10% | 10% (Note1) | 10% | 10% |
40 | Malaysia | 5% | 10% (Note1) | 10% | 10% |
41 | Malta | 10% | 10% (Note1) | 10% | 10% |
42 | Mongolia | 15% | 15% (Note1) | 15% | 15% |
43 | 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% |
44 | Montenegro | 5% (in some cases 15%) | 10% (Note1) | 10% | 10% |
45 | Myanmar | 5% | 10% (Note1) | 10% | No separate provision |
46 | Morocco | 10% | 10% (Note1) | 10% | 10% |
47 | Mozambique | 7.5% | 10% (Note1) | 10% | No separate provision |
48 | Macedonia | 10% | 10% (Note1) | 10% | 10% |
49 | Namibia | 10% | 10% (Note1) | 10% | 10% |
50 | Nepal | 5%**, 10% | 10% (Note1) | 15% | No separate provision |
51 | Netherlands | 10% | 10% (Note1) | 10% | 10% |
52 | New Zealand | 15% | 10% (Note1) | 10% | 10% |
53 | Norway | 10% | 10% (Note1) | 10% | 10% |
54 | Oman | a) 10%, if at least 10% of shares are held by the recipient company b) 12.5%, in other cases | 10% (Note1) | 15% | 15% |
55 | 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 cases [Note1] | 15% if it is payable in pursuance of any collaboration agreement approved by the Government of India | No separate provision |
56 | Poland | 10% | 10% (Note1) | 15% | 15% |
57 | Portuguese Republic | 10%***/15% | 10% | 10% | 10% |
58 | Qatar | 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% (Note1) | 10% | 10% |
59 | Romania | 10% | 10% (Note1) | 10% | 10% |
60 | Russian Federation | 10% | 10% (Note1) | 10% | 10% |
61 | Saudi Arabia | 5% | 10% (Note1) | 10% | No separate provision |
62 | Serbia | a) 5%, if recipient is company and holds 25% shares; b) 15%, in any other case | 10% (Note1) | 10% | 10% |
63 | 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% |
64 | Slovenia | a) 5%, if at least 10% of the shares of the company paying the dividend is held by the recipient company; b) 15%, in other cases | 10% | 10% | 10% |
65 | South Africa | 10% | 10% (Note1) | 10% | 10% |
66 | Sri Lanka | 7.5% | 15% (Note1) | 10%/20%[Note 3] | 20%[Note 3] |
67 | Sudan | 10% | 10% (Note1) | 10% | 10% |
68 | Sweden | 10% | 10% (Note1) | 10% | 10% |
69 | Swiss Confederation | 10% | 10% (Note1) | 10% | 10% |
70 | 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% (Note1) | 10% | No separate provision |
71 | 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% (Note1) | 10% | No separate provision |
72 | Tanzania | 5%****, 10% | 10% | 10% | No separate provision |
73 | Thailand | 10% | 10% (Note1) | 10% | No separate provision |
74 | Trinidad and Tobago | 10% | 10% (Note1) | 10% | 10% |
75 | Turkey | 15% | a) 10% if loan is granted by a bank, etc.;b) 15% in other cases [Note1] | 15% | 15% |
76 | Turkmenistan | 10% | 10% (Note1) | 10% | 10% |
77 | Uganda | 10% | 10% (Note1) | 10% | 10% |
78 | 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% (Note1) | 10% | 10% |
79 | 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 |
80 | United Mexican States | 10% | 10% (Note1) | 10% | 10% |
81 | United Kingdom | 15%/10%(Note 4) | a) 10%, if interest is paid to a bank; b) 15%, in other cases [Note1] | ||
82 | 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%[Note 2] | 10%/15%[Note 2] |
83 | Uruguay | 5% | 10% (Note1) | 10% | 10% |
84 | Uzbekistan | 10% | 10% (Note1) | 10% | 10% |
85 | Vietnam | 10% | 10% (Note1) | 10% | 10% |
86 | 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% (Note1) | 10% | 10% |
*If the beneficial owner is a company (other than a partnership) which holds directly at least 10% of the capital of the company paying the dividends.
**5% if the beneficial owner of shares is a company and it holds at least 10% of shares of the company paying the dividends.
***If the beneficial owner is a company that, for an uninterrupted period of two fiscal years prior to the payment of the dividend, owns directly at least 25% of the capital stock of the company paying the dividends.
****5% if the recipient company owns at least 25% share in the company paying the dividend.
Note 1 – Dividend / interest earned by the Government and certain specified institutions, inter-alia, Reserve Bank of India is exempt from taxation in the country of the source (subject to certain condition).
Note 2 – Royalties and fees for technical services would be taxable in the country of the source at the rates prescribed for different categories of royalties and fees for technical services. These rates shall be subject to various conditions and nature of services / royalty for which payment is made.
Note 3 – Royalties and fees for technical services would be taxable in the country of the source at the following rates:
- 10% in case of royalties relating to the payments for the use of, or the right to use industrial, commercial or scientific equipment;
- 20% in case of fees for technical services and other royalties.
Note 4
- 15% of the gross amount of the dividends where those dividends are paid out of income (including gains) derived directly or indirectly from immovable property within the meaning of Article 6 by an investment vehicle which distributes most of this income annually and whose income from such immovable property is exempted from tax;
- 10% of the gross amount of the dividends, in all other cases
Note 5 – The Central Board of Direct Taxes has clarified that DTAA signed with the Government of the Czech Republic on the 27th January 1986 continues to be applicable to the residents of the Slovak Republic. [Notification No. 25, dated 23-03-2015].
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FAQ
1. Who falls under DTAA's coverage?
Ans: People who are citizens of one country while earning income in another are eligible for coverage under the Double Taxation Avoidance Agreement (DTAA).
2. How can I avail DTAA advantages?
Ans: NRIs fall under the purview of DTAA. They must provide their “Tax Residency Certificate (TRC)” to the deductor, along with Form-10F and PAN No.
3. How many nations have signed DTAA agreements with India?
Ans: India currently has operational Double Taxation Avoidance Agreements (DTAA) with 86 out of a total of 88 countries.
