Octagona Srl/Internationalization News/Greater tax burden for Italian companies without PAN
Greater tax burden for Italian companies without PAN

Greater tax burden for Italian companies without PAN

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

The new TDS provision was included in the Income Tax Act, 1961 and took effect April 1, 2010. The imposition of penalties on those without the NAP was already announced in the 2009-10 Budget and has the effect goal is to strengthen the tax department's database and increase tax discipline.

It should be borne in mind that the norm it is also applicable to all foreign persons providing services in India and, in general, on all payments or money remittances subject to TDS. For all Italian companies that carry out frequent sales operations in India it is therefore advisable to request the PAN to avoid very high withholding taxes.

To avoid disputes on 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 does not comply with these obligations, he will have to withhold a TDS higher than the normal percentage of deduction.

For more information on how to get your PAN number you can send an email to octagona@octagona.com.

Octagona, an international business consultancy based in Carpi (MO) and New Delhi (India), specializes in providing services that allow Italian companies to start or develop their own internationalization process on the Indian market and the SAARC area.

 

Source: The Indian Express

 

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