I own an LLP firm and we intend to hire topic experts from the US for freelance content writing. US residents will be hired on a per-article basis and the payments per article might vary from $50 to $300. We're concerned about the complexities of TDS requirements, Form 15CA filing, and the mode of payments available. We recently learned that the nature of the freelancer services can be classified 'Independent personal services' that attracts Article 15 of DTAA and that we won't be liable to deduce any TDS for the payments made. 1) Are there any sections that we don't know of which would make use pay TDS? The nonresidents won't have a PAN card in India. 2) What all forms and documents should we ask from the Non Resident? Is the Tax Residency Certificate compulsory in this case? 3) Do we need to file both 15CA and CB for each payment, or just the D part of 15CA and no 15CB? 4) Since the amount per payment is small ($50 to $300), we would have preferred a cheaper mode of payment like PayPal (3.5%) instead of SWIFT payments where the fees are as high as $35 per payment. Is PayPal really an option for us? If it's not, what do you think is the best way forward for us in terms of mode of payment? 5) We already did a few US freelancer payments through PayPal without furnishing 15CA since we didn't know the process. What should we do about that? Would it bite us in the future?
They could fall under literary work under article 15 but that is not a 100% thing as there is no definition of literary work.
Further for taking benefit of DTAA you must have TRC from that person that he is tax resident of such country along with no PE and then you might save yourself from deducting TDS.
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- Ask TRC from non-resident individuals to give benefit of Article 15 of DTAA.
For detailed discussion, please take phone consultation.
