Treaty Requires Halving Dividend Tax, Indian Court Rules

Law360 (April 30, 2021, 6:27 PM EDT) -- A court in India said a provision of the country's tax treaty with the Netherlands requires applying withholding tax at 5% — half the standard rate — for domestic businesses paying dividends to their Dutch parent companies.

The April 22 decision from the Delhi High Court addressed joined cases involving two Dutch-registered providers of information technology services — Concentrix Services Netherlands BV and Optum Global Solutions International BV, each with a wholly owned subsidiary in India. After local tax authorities issued the parent companies withholding tax certificates at a rate of 10%, the subsidiaries were allowed to remit dividends only when...

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