Higher tax burden for Italian companies without PAN

As of April 2010, sales of services without a Permanent Account Number (PAN) are subject to higher taxation. In fact, the Government of India has declared that a higher withholding tax (20% and above) will be withheld on all transactions subject to Tax Deduction at Scource (TDS) for which the taxpayer does not have a PAN.

The new TDS provision was included in the Income Tax Act, 1961 and is effective April 1, 2010. The imposition of penalties against those who do not have PAN had already been announced in Budget 2009-10 and is intended to strengthen the tax department's database and increase fiscal discipline.

It should be kept well in mind that the Is also applicable to all foreign entities providing services in India and, in general, on all payments or remittances of money subject to TDS. For all Italian companies with frequent sales operations in India it is therefore advisable to apply for PAN To avoid very high source retention.

In order to avoid disputes over whether or not to indicate the NAP, it is also stipulated that. both the customer and the supplier must include the supplier's PAN in all correspondence, invoices, vouchers and other documents exchanged between the parties. If the customer fails to comply with these obligations, he will have to withhold a TDS higher than the normal deduction percentage.

For more information on how to obtain your PAN number, you can send an e-mail to the following address. [email protected].

Octagona, a consulting firm in international business with offices in Carpi (MO) and New Delhi (India), specializes in providing services that enable Italian companies to start or develop their internationalization process in the Indian market and SAARC area.

Source: The Indian Express

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