If you’re a UAE company invoicing Indian clients, you’ve likely faced a 10% withholding tax (WHT) deducted on your payments. But did you know that under the UAE–India Double Taxation Avoidance Agreement (DTAA), this WHT can be reduced to 0% — if your TRC and UAE presence are structured properly? This blog breaks down how to do it legally and defensibly.

Under Article 12 of the UAE–India DTAA, technical services exported from the UAE to India can qualify for 0% withholding tax if the following conditions are met:

1. ✅ The UAE entity is a resident for tax purposes — proven via a valid TRC.
2. ✅ It is not a shell or conduit — i.e., it has operational and economic substance in the UAE.
3. ✅ The Place of Effective Management (PoEM) is in the UAE.
4. ✅ The income is generated from activities carried out in the UAE.

✅ Success Case – Software Development Firm

A Dubai South Free Zone company offered custom development services to Indian clients. The company had:

• 2 UAE-based developers and a project manager
• A valid lease agreement in Dubai
• UAE accounting and VAT compliance
• Contract execution and delivery tracked through UAE logins

Fastlane helped them file for a TRC, compile a DTA letter, and advise the Indian client on documentation. The client agreed to 0% WHT.

❌ Failure Case – Zero Substance Entity

A UAE company had a license under IFZA but:

• No staff, no office, no bank account
• Directors based outside the UAE
• Invoiced Indian clients with no UAE involvement

Despite holding a TRC, Indian tax authorities denied treaty relief under GAAR, citing that the entity lacked economic substance and PoEM.

To successfully claim WHT relief under the DTAA, ensure your company has:

• ✅ Valid TRC from UAE FTA
• ✅ UAE office lease or coworking membership
• ✅ UAE-based employees or contractors
• ✅ Board decisions documented in UAE
• ✅ UAE-issued invoices
• ✅ Active UAE bank account with fund flows
• ✅ Contracts signed and delivered from UAE
• ✅ Local audit and VAT filings (if applicable)

The TRC is necessary, but not sufficient. India — and other countries — will dig deeper. You need real operations, staff, governance, and substance in the UAE to justify 0% WHT claims.

At Fastlane, we’ve supported over 100 UAE companies in building DTA-compliant operations and avoiding WHT in India, the UK, and Singapore. Our service includes:

• ✅ Setting up UAE licenses with right activity codes
• ✅ Helping you hire or contract UAE staff
• ✅ Leasing co-working or physical space with proper documentation
• ✅ Drafting board resolutions, minutes, and control logs
• ✅ Assisting in bank account setup, audits, and PoEM mapping
• ✅ Preparing DTA support letters and compliance packages for Indian clients
• ✅ Defending your case if challenged by Indian tax authorities
  
  

Whether you're a tech services provider, consultant, or agency — we’ll ensure your UAE structure isn’t just legal, but defensible.