On paper this is one of the less generous treaties India has signed: fifteen and twenty-five per cent where others sit at ten. But the fees-for-included-services article carries a make-available condition, so a good deal of ordinary Canadian consulting work is not taxable in India at all — and the rate you never pay beats the rate you negotiate.
Included services are only caught where the service makes technical knowledge, experience or skill available to the Indian payer — leaving them able to apply it independently. A Canadian firm delivering a result rather than a capability generally falls outside it, whatever the headline rate says.
Fifteen per cent needs a corporate shareholder holding at least ten per cent. A portfolio holding or an individual shareholder sits at twenty-five, which is close to the domestic rate and worth planning around before the shares are issued.
The single most common Canadian file we see. Tax is withheld on the whole sale consideration, not on the gain, so the deduction routinely exceeds the actual liability by a wide margin — and the way back is a lower-deduction certificate before the sale, or a refund claim after it.
India and Canada have a totalisation agreement, so an employee posted between the two can stay in their home scheme on a certificate of coverage. That is a real difference from the United States, where no such agreement exists.
One of the largest NRI populations, usually with property or inherited assets.
Billing Indian clients and being withheld on.
With an Indian subsidiary paying dividends or fees.
Every case is different, so we review yours first and give you a clear price before any work or payment — no charge for the review, no obligation.
No hidden charges. You decide after you see the price.
💬 Get my quote →Dividends are capped at 15% where the Canadian recipient is a company holding at least 10% of the Indian payer, and 25% otherwise. Interest is capped at 15%. Royalties are capped at 15% generally, with a lower 10% rate for royalties on industrial, commercial or scientific equipment. Fees for included services are capped at 15%. These are among the higher treaty rates India has agreed, which makes the make-available condition on services correspondingly more valuable.
Yes. Fees for included services are only within the article where the technical or consultancy service makes technical knowledge, experience, skill, know-how or processes available to the person paying for it, or consists of the development and transfer of a technical plan or design. A Canadian firm that performs an analysis and delivers a report has generally not made anything available; one that trains the Indian team to do it themselves probably has. Because the rate here is 15% rather than 10%, establishing that a fee falls outside the article is worth more under this treaty than under most.
The buyer must withhold tax under the non-resident provisions, and the critical point is that the withholding applies to the entire sale consideration rather than to your gain. On a property bought years ago the tax deducted can be several times the actual liability. There are two ways out: apply for a lower-deduction certificate before the sale so the buyer withholds on a realistic figure, which is much the better route, or let the full deduction happen and claim the refund by filing an Indian return, which works but ties the money up for a year or more. The buyer also needs a TAN for this, which surprises most buyers.
It is Indian-source income and remains taxable in India, with tax withheld by the tenant at the non-resident rate. You file an Indian return, claim the standard deduction against the rent and any interest on a housing loan, and recover the excess withheld. Canada then taxes the same income as part of your worldwide income and gives a foreign tax credit for the Indian tax. The two filings are separate exercises and the Indian one usually produces a refund — which is why not filing is more expensive than filing.
Yes. India and Canada have a totalisation agreement, so an employee posted from one country to the other can remain in their home social security scheme and be exempted in the host country on producing a certificate of coverage, rather than contributing to both. For an Indian company posting someone to Canada, or a Canadian national on an Indian payroll who would otherwise be an international worker contributing to the provident fund on full salary, this is worth real money. The exemption has to be claimed with the certificate; it is not automatic.
A fixed place of business, a building site or installation project exceeding the treaty threshold, or a dependent agent habitually concluding contracts. The treaty also has a services limb covering the furnishing of services in India through personnel beyond a specified period. Because the treaty otherwise removes make-available-failing service fees from Indian tax, the permanent establishment test does a lot of work — a Canadian firm that repeatedly sends consultants to India for long engagements should check it even if the fees themselves are not taxable as included services.
A Canadian certificate of residency for the relevant period, the declaration in Form 41 filed electronically, and then Form 145 on the remittance with an accountant's certificate in Form 146 where required. Where you are arguing that an included-services fee falls outside the article because nothing is made available, expect the Indian payer to want that position in writing — the exposure for under-withholding is theirs, not yours, which is why they ask.
Leave your number — our team calls you back. Free, no obligation.
EaseValue