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You've raised an invoice to an Indian customer, but the payment that lands is short — sometimes by a fifth. That's TDS (tax deducted at source): under Indian law, the payer may have to withhold tax on payments to a foreign company before remitting the balance. The good news is that the India–UAE Double Tax Avoidance Agreement (DTAA) exists precisely to stop the same income being taxed twice — and for a genuine UAE business, it can mean 0% withholding.
But the treaty rate isn't automatic. You only get it if you hand the Indian payer the right paperwork — starting with a UAE Tax Residency Certificate (TRC). Without it, the default domestic rates apply.
The two outcomes
0% under the treaty — or up to 20% without it
Which rate applies turns on two things: the nature of your income, and whether you've produced the treaty documents.
| Scenario | Likely Indian withholding |
|---|---|
| Normal business / service income, no PE in India, treaty documents provided | 0% under DTAA |
| Royalty or fees for technical services (FTS), treaty documents provided | Reduced treaty rate |
| No TRC / Form 10F — domestic law applies | Up to 20% + surcharge & cess (Sec. 115A) |
The strong position
Why genuine service income can be 0%
The heart of it is Article 7 of the India–UAE DTAA: the business profits of a UAE enterprise are taxable only in the UAE — unless that enterprise has a Permanent Establishment (PE) in India. So if your UAE company:
- has no PE, office, or employees in India,
- renders its services from the UAE / outside India,
- earns normal business or service income (not royalty or technical-service fees), and
- provides the treaty documents below,
then the better position is no TDS — 0% withholding in India, because there's no PE to give India a taxing right over your business profits.
No Permanent Establishment in India means your business profits belong to the UAE under Article 7 — and the Indian payer has no basis to withhold.
The fallback
When it isn't 0% — royalty, FTS, or missing papers
Two situations change the answer:
- Your income is royalty or fees for technical services These are dealt with separately in the treaty (not under business profits), and carry their own treaty rate rather than 0%. Whether your income is "technical services" or ordinary services is a question of fact worth getting right.
- You don't provide the documents If the treaty isn't claimed — no TRC, no Form 10F — the Indian payer must fall back to domestic law. For royalty/FTS to a foreign company, the domestic rate under Section 115A can be 20% plus surcharge and cess.
The document pack
What the UAE company must provide
To claim the treaty rate, your Indian customer's finance team will expect:
- UAE Tax Residency Certificate (TRC) Issued by the UAE Federal Tax Authority — the cornerstone document.
- Form 10F A declaration of residence details, filed on the Indian income-tax portal.
- No Permanent Establishment (No PE) declaration Confirming you have no PE in India.
- Beneficial ownership declaration Confirming you're the beneficial owner of the income.
- Invoice and service agreement Evidencing the nature of the services.
- TRN / company documents If the payer requests them.
⚠️ The calendar-year TRC trap
India's tax year runs April to March, but a UAE TRC is often issued for a calendar year. A TRC for January–December won't cover January–March of the next Indian tax year — so you may need a second TRC (and Form 10F) to cover the gap. This timing mismatch catches more businesses than anything else. Form 10F is now filed electronically, and Indian filing requirements evolve, so confirm the current process before each remittance.
Getting your TRC
UAE TRC — eligibility and fees
We obtain the UAE Tax Residency Certificate for resident companies. Indicatively:
| Item | Amount |
|---|---|
| Our service fee | AED 500 |
| FTA fee — company with a Corporate Tax TRN | AED 550 |
| FTA fee — company without a Corporate Tax TRN | AED 1,050 |
Eligibility: the company should have at least one year of operations to apply. Final FTA fees depend on your registration status at the time of application.
0%
Possible TDS with treaty + no PE
20%
Sec. 115A fallback (royalty/FTS)
Art. 7
Business profits → UAE only
1 year
Min. operations for a TRC
Stop the 20% before your next Indian invoice
We obtain your UAE Tax Residency Certificate and help assemble the full treaty pack — TRC, Form 10F, No PE and beneficial ownership declarations — so your Indian customers can release payment without over-withholding.
The service you'll need
From AED 500 + FTA fee
UAE Tax Residency Certificate
We obtain your TRC from the FTA and support the treaty documentation your Indian payer needs.
Learn more →
Lower FTA fee
Corporate Tax Registration & Filing
A Corporate Tax TRN reduces the FTA's TRC fee — and keeps you compliant at home.
Learn more →
FAQ
Frequently asked questions
Why is my Indian client deducting tax from my UAE invoice?
Indian law requires payers to deduct tax at source on certain payments to foreign companies. Without treaty documents, domestic rates apply — up to 20% plus surcharge and cess for royalty/technical-service fees under Section 115A. Claiming the India–UAE DTAA can reduce or eliminate this.
How can the withholding be 0%?
Under Article 7 of the India–UAE DTAA, the business profits of a UAE enterprise are taxable only in the UAE unless it has a Permanent Establishment in India. If you have no PE, render services from the UAE, earn normal business income, and provide a TRC, Form 10F and a No PE declaration, the position is generally 0% TDS.
What documents do I need to give my Indian customer?
A UAE Tax Residency Certificate, Form 10F, a No Permanent Establishment declaration, a beneficial ownership declaration, your invoice and service agreement, and your TRN/company documents if requested.
Does this 0% apply to royalty or technical-service fees?
Generally no — royalty and fees for technical services are treated separately in the treaty and carry their own rate, not 0%. Whether your income is ordinary service income or technical-service fees is a factual question that affects the outcome.
How much does a UAE TRC cost and who can apply?
Our service fee is AED 500; the FTA fee is AED 550 if you hold a Corporate Tax TRN, or AED 1,050 if you don't. The company should have at least one year of operations to apply.
Does my TRC cover India's full tax year?
Not always. India's tax year is April–March, while a UAE TRC is often issued for a calendar year. A January–December TRC won't cover January–March of the next Indian year, so a second TRC and Form 10F may be needed to bridge the gap.
This article is for general information only and does not constitute tax or legal advice in the UAE or India. Treaty positions depend on your specific facts; Indian withholding and procedural requirements change and should be confirmed with an Indian tax adviser. Fees are indicative. For your UAE TRC, contact Fastlane Consultancy.