—Guide
Form 15CB: What a CA Checks Before Certifying a Foreign Remittance
The analysis behind a Form 15CB certificate — nature of the payment, taxability under Indian law and tax treaties, permanent establishment, the TDS rate, grossing up and documents.
Form 15CB is a chartered accountant's certificate on the tax treatment of a payment to a non-resident. It's more than a formality: the CA must analyse whether and how much tax should be deducted. This guide explains what's checked.
1. Nature of the Payment
The CA reviews the contract and invoice to classify the payment: royalty, fees for technical services, interest, dividend, business income, capital gains, reimbursement or something else. The classification drives everything that follows.
2. Taxability Under Indian Law
Is the income taxable in India under domestic law? Royalties and technical fees are often taxable even if the service is performed abroad; business profits generally aren't unless there's a business connection in India.
3. Tax Treaty Position
- Is the recipient resident in a treaty country, with a TRC and Form 10F?
- Does the treaty narrow the definition — for example, 'make available' clauses for technical services in some treaties?
- Does the treaty give a lower rate?
- Does the recipient have a permanent establishment in India?
4. The TDS Rate
The CA applies the lower of the domestic rate (with surcharge and cess) and the treaty rate. If the recipient has no PAN, higher rates can apply unless conditions are met.
5. Grossing Up
Where the payer bears the tax, the payment is grossed up so the recipient receives the agreed net amount.
6. Documents Retained
- Contract and invoice.
- TRC and Form 10F.
- No-PE declaration where relevant.
- TDS challan.
Getting Help
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