Form 145 for Technical Services Paid to Non-Residents
Learn how Form 145 applies to technical service payments to non-residents.
Indian companies often engage foreign businesses or professionals for technical, engineering, IT or specialised services.
When payment is made outside India, the company needs to consider the tax implications before sending the money.
When Does Form 145 Come In?
Where the payment is within the scope of Rule 220, Form 145 needs to be considered before the remittance. The applicable part depends on whether the payment is taxable and, where relevant, whether the aggregate exceeds ₹5 lakh during the tax year.
The taxability of technical services should be determined from the actual arrangement.
What Should You Review?
Before making the payment, check:
- Agreement with the foreign service provider
- Exact nature of technical services
- Invoice
- Place and manner in which services are provided
- Foreign recipient's country of residence
- Applicable domestic tax provisions
- DTAA provisions, where relevant
- TDS position
- Form 145 requirement
Example
An Indian engineering company hires a foreign specialist to provide technical support for a project.
The company should not decide the tax treatment merely because the invoice says "technical services."
The agreement and actual services should be reviewed first.
If the payment is taxable and the relevant amount exceeds ₹5 lakh, the company may need to consider Part B or Part C of Form 145, depending on the certification route.
How 145146.com Can Help
Technical-service payments can involve many invoices and different foreign vendors.
With 145146.com, businesses can manage Form 145 and Form 146 preparation in bulk while also getting tax assistance for the compliance questions behind those filings.
The value is particularly useful where the finance team has to process multiple technical-service payments rather than one transaction.
Final Takeaway
For technical-service payments, the important step is establishing what service was actually provided and how it is treated for tax purposes before completing the remittance process.