{"url":"https://lrlabs.ai/t/auto_wht_sweden","engine":"deterministic","llm_in_path":false,"id":"auto_wht_sweden","question":"What is the India–Sweden treaty withholding rate on royalties and fees for technical services?","answer":"Royalty: 10% of the gross amount — Article 12 (combined 'Royalties and fees for technical services'), India–Sweden DTAA (as amended through 20 Aug 2026). The equipment limb is NOT in this treaty's royalty definition, so payments for the use of equipment fall outside the royalty article altogether — they are business profits (PE required) or other income on the treaty's own terms, NOT taxable at the royalty rate. FTS: 10% — Article 12. Make-available (or the lower rate) was claimed only through the MFN protocol — DENIED without a s.159(1)/s.90(1) notification since Nestlé SA (2023 INSC 928). MFN CAUTION: Protocol to the 1997 Convention contains a broad MFN clause covering Articles 10, 11 AND 12, verbatim: 'If India according to any agreement, understanding or protocol between India and a third state, which is a member of OECD, limits its source taxation under Articles 10 (Dividends), 11 (Interest) and 12 (Royalty and fees for technical services)... to a lower percentage or a more limited scope than the percentage or scope specified in this Convention on such income, the same percentage or scope specified in that agreement, understanding or protocol shall also apply under this Convention.' Commonly claimed corridors: (a) importing the make-available FTS restriction from India–Portugal (also India–US/UK style scope) to exclude non-make-available services; (b) importing narrower royalty scope (e.g., Portugal's exclusion/lower treatment). Sweden was also among the treaties debated in the MFN saga alongside Netherlands/France/Switzerland. Post-Nestle SA v AO (SC, 19 Oct 2023) an s.90(1) notification is mandatory for MFN benefits and NO notification has been issued for the Sweden MFN — so MFN-based claims (esp. make-available import) are currently blocked on the revenue's view; CBDT Circular 3/2022 takes the same line. Since the headline rate is already 10%, MFN exposure here is about SCOPE (make-available), not rate. 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: Single combined Article 12 for royalties AND FTS at one flat 10% rate — no equipment lane, no graduated splits; Royalty definition (Art. 12(3)(a)) has NO 'industrial, commercial or scientific equipment' limb per the primary text — equipment-use/leasing payments fall outside Article 12 (business profits, taxable only with a PE), an unusual and favourable feature; do not encode an equipment royalty rate; No make-available condition in treaty text — make-available only ever available via the Protocol MFN clause, now blocked post-Nestle absent a s.90(1) notification; MFN clause is unusually broad: covers rate AND scope across dividends, interest, royalties and FTS, and reads as self-operational ('shall also apply') — but SC Nestle holds notification is mandatory regardless; FTS definition expressly carves out payments for services under Articles 14 (independent personal services) and 15 (dependent personal services); Indian government treaty portal (incometaxindia.gov.in) blocks scripted access and its legacy URL serves the superseded 1989 convention — the in-force English text was verified from the Swedish government side (Riksdag, SFS 1997:918).","pinpoint":"Article 12 (combined 'Royalties and fees for technical services'), India–Sweden DTAA","confidence":"verified","as_at":"14 Aug 2026","treaty":"India–Sweden"}