{"query":"What is the India–Spain treaty withholding rate on royalties and fees for techni","matches":[{"id":"auto_wht_spain","question":"What is the India–Spain treaty withholding rate on royalties and fees for technical services?","answer":"Royalty: 10% of the gross amount — Article 13 (Royalties and fees for technical services) — note: royalties/FTS are Art 13, not 12; Interest is Art 12, India–Spain DTAA (as amended through 20 Aug 2026). Equipment-use royalties sit inside the royalty definition and take the same 10%. FTS: 10% — Article 13 (combined with royalties); definition in Art 13(4), rate in substituted Art 13(2). MFN CAUTION: Protocol clause 7 (integral to the Convention) is a self-executing-worded MFN: if India, in a treaty with an OECD member entering into force after 1-1-1990, limits source taxation on royalties/FTS to a LOWER RATE or MORE RESTRICTED SCOPE, the same applies to Spain. Post-Nestle SA (2023 SCC OnLine SC 1372) a s.90(1) notification is mandatory. India ISSUED one for the rate: CBDT Notification No. 33/2024 dated 19 March 2024 substitutes Art 13(2) at 10% (importing India-Germany 1996), effective AY 2024-25. So the 10% rate is now IN the notified treaty text — no MFN argument needed for the rate from AY 2024-25. Residual exposure: (a) periods before AY 2024-25 where 10% was claimed on MFN alone; (b) scope claims (make-available via India-Portugal) which remain unnotified. Verbatim operative MFN words: 'India limits its taxation at source on royalties or fees for technical services to a rate lower or a scope more restricted than the rate or scope provided for in this Convention... the same rate or scope... shall also apply under this Convention.' Gate: the treaty rate applies only through s.393(2) Sl. No. 17 → s.2(90)(c) with the s.159(8) TRC + Form 10F gate met; domestic comparator 20% + surcharge/cess (s.207(2)). Notes: Royalties and FTS sit in Article 13, not Article 12 (Interest is Art 12, Capital Gains Art 14) — off-by-one vs the common India-treaty numbering; citing 'Art 12' for Spain royalties is wrong; Single combined royalties+FTS article; FTS definition omits 'managerial' services (technical/consultancy only) — narrower than s.9(1)(vii) Explanation 2 of the IT Act; Rate now set by a s.90(1) notification substituting treaty text (Notification 33/2024), a post-Nestle pattern: the operative Art 13(2) exists only as notified text, not in the originally signed Convention; Original Art 13(2) split (10% equipment / 20% other royalties & FTS) is dead law from AY 2024-25 but governs earlier open years absent an MFN claim; MFN clause covers scope as well as rate; only the rate was notified — make-available-via-Portugal claims remain unnotified; Art 14(5): source-state taxation of gains on alienation of shares forming a participation of at least 10% — unusual substantial-participation gains clause; Treaty has both a bilateral LOB (Art 28B, beneficial-ownership based, 2012 Protocol) and the MLI PPT layered on top; Treaty also covers capital taxes (wealth tax), reflecting its 1993 vintage.","pinpoint":"Article 13 (Royalties and fees for technical services) — note: royalties/FTS are Art 13, not 12; Interest is Art 12, India–Spain DTAA","confidence":"verified","as_at":"14 Aug 2026","match_score":2,"treaty":"India–Spain"}],"engine":"deterministic","llm_in_path":false}