Anantkumar Hegde - Parliament

GOVERNMENT OF INDIA

MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

LOK SABHA

UNSTARRED QUESTION NO. 33I9

TO BE ANSWERED ON FRIDAY, THE OSTH AUGUST, 2016

SHRAVANA 14, 1938 (SAKA)

Dividend and Royalty Payment by Foreign Companies

3319. SHRI ANANTKUMAR HEGDE: Will the Minister of FINANCE be pleased to state (a) whether foreign investors are earning high dividend by making capital investment in the country or in the form of royalty

if so, the dividend and royalty amount sent out of the country during 2014-15 and 2015- 16 so far, country-wise;

whether this earning of foreign investors is taxable;

and if so, the details thereof and if not, the reasons therefor?

ANSWER

Minister of State in the Ministry of Finance

(SHRI ARJUN RAM MEGHWAL)

(a) & (b) Government does not maintain segregated country-wise details of remittance on account of dividend or royalty. However, the aggregate amount with regard to the royalties, copyright and license fees and dividends during last two years as recorded in lndia's Balance of Payments statistics are set out in table below.

(i) The dividend is taxable at the rate of twenty percent. However, dividend which has suffered taxation under section 1 15-O of the Act, is exempt.

(ii) The royalty is taxable at the rate of ten percent. However, in case of non-residents (not being a company) or a foreign company which carries on business in lndia through a permanent establishment (PE) and the royalty is connected to that PE; it is taxable as Profits and gains from business or profession under section 44DA of the Act. Further, in respect of foreign investors of countries or territories with which lndia has Double Taxation Avoidance Agreement (DTAA), out of the provisions of the Act as above and those of the DTAA; those provisions are applicable which are more beneficial to such foreign investors. Year Royalties, copyright and license fees Debit Debit 2014-15 4,820 3,290 201 5-16 4,891 4,127 Dividend