DTAA Declaration Format for Non-Residents: Tax Residency & Beneficial Ownership (2025-26)

DECLARATION BY NON-RESIDENT FOR AVAILING DTAA BENEFITS

(To be issued on the Letterhead of the Non-Resident Entity)

Date: [Date]

To: [Name of Indian Payer/Deductor]

Address: [Address of Indian Entity]

Re: Declaration regarding Tax Residency, Beneficial Ownership, and Eligibility for Tax Treaty Benefits for the Financial Year [Year]

Dear Sir/Madam,

With reference to the payments receivable by us from [Name of Indian Entity], we, [Name of Non-Resident Entity], hereby declare and confirm the following information to facilitate the determination of the appropriate withholding tax rate under the Income-tax Act, 1961/2025 read with the Double Taxation Avoidance Agreement (DTAA) between India and [Country of Residence]:

1. General Information and Tax Residency
   1. Legal Status: We are a [Company/Partnership/Trust/Individual] legally incorporated/constituted under the laws of [Country].
   2. Tax Residency: We are a tax resident of [Country] as per Article 4 of the India-[Country] DTAA and are liable to tax therein by reason of our domicile, residence, place of management, or other similar criteria.
   3. Tax Residency Certificate (TRC): We hold a valid Tax Residency Certificate (TRC) issued by the revenue authorities of [Country] for the relevant period, a copy of which is enclosed. We confirm that the details provided in Form 10F (as prescribed under Indian Income Tax Rules) are accurate.
   4. Place of Effective Management (POEM): Our Place of Effective Management is situated in [Country] and not in India. We do not have a dual residency status that would require a tie-breaker analysis by Competent Authorities under Article 4(3) of the MLI/DTAA.
2. No Permanent Establishment (PE) in India
   1. Fixed Place PE: We do not have a fixed place of business in India (such as a branch, office, factory, or workshop) through which our business is wholly or partly carried on.
   2. Service PE: We do not uphold a Service PE in India; our employees or personnel have not furnished services in India for a period exceeding the threshold specified in the DTAA.
   3. Agency PE: We do not have a person in India acting on our behalf who habitually exercises an authority to conclude contracts or plays the principal role leading to the conclusion of contracts.
   4. Significant Economic Presence (SEP): We confirm that our aggregate payments arising from transactions with persons in India or our systematic soliciting of business/interaction with users in India does not constitute a "Significant Economic Presence" or "Business Connection" as defined under Section 9(1)(i) of the Indian Income-tax Act, 1961.
3. Beneficial Ownership
   1. Sole Beneficiary: We are the ultimate beneficial owner of the income (Dividend/Interest/Royalty/FTS) receivable from you. We have the full right to use and enjoy the income unconstrained by a contractual or legal obligation to pass on the payment to another person.
   2. Not a Conduit: We are not acting as an agent, nominee, or conduit company for any other person. We are not a flow-through entity where the income is contractually required to be transferred to a third party resident in a different jurisdiction.
4. Principal Purpose Test (PPT) and GAAR
   1. Commercial Rationale: The arrangement or transaction resulting in this payment has valid commercial reasons and reflects economic reality.
   2. No Abuse of Treaty: Obtaining the tax benefit under the DTAA is not one of the principal purposes of the arrangement or transaction. The granting of the tax benefit is in accordance with the object and purpose of the DTAA.
   3. GAAR Compliance: The transaction is not an "impermissible avoidance arrangement" under the General Anti-Avoidance Rules (GAAR) of the Indian Income-tax Act. It does not lack commercial substance and was not entered into with the main purpose of obtaining a tax benefit.
5. Limitation on Benefits (LOB) (Applicable if the specific DTAA or MLI contains an LOB clause) We confirm that we satisfy the Limitation on Benefits provisions under Article [Number] of the DTAA/MLI. Specifically, we qualify as a "Qualified Person" because:

[ ] We are a publicly traded company listed on a recognized stock exchange; OR

[ ] We meet the ownership and base erosion test (more than 50% owned by qualified persons and less than 50% of gross income is paid as deductible payments to non-residents) ; OR

[ ] We are engaged in the active conduct of a trade or business in our residence state, and the income derived from India is connected to that business.

6. Indemnity

We hereby certify that the information provided above is true, correct, and complete. We undertake to indemnify and hold [Name of Indian Payer] harmless from any tax, interest, or penalty levied by the Indian Income Tax Authorities due to any misrepresentation or change in the facts stated above. We undertake to immediately notify you of any change in our residential status or the details provided herein.

For [Name of Non-Resident Entity]

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Authorized Signatory Name:

Designation:

Tax Identification Number (Country of Residence):