If a UAE company receives royalty income from India, it must file Form 10F along with a Tax Residency Certificate (TRC) and a No Permanent Establishment (No PE) Declaration to claim the reduced 10% DTAA rate instead of the standard 20% TDS rate under Section 115A. This applies to any foreign company earning royalties or Fees for Technical Services (FTS) from Indian payers. The process requires the foreign entity to obtain a PAN card, create an Indian income tax login, and arrange a DSC of the authorised foreign signatory for ITR filing.

• UAE-India DTAA royalty rate: 10% (vs 20% + surcharge + cess under Section 115A without DTAA benefit)
• Form 10F must be filed electronically on the Indian income tax portal
• Non-compliance results in TDS being deducted at 20% + surcharge + cess under Section 115A

What is Form 10F and Why Does It Matter for UAE-India Royalty Payments?

Form 10F is a self-declaration form prescribed under Rule 21AB of the Income Tax Rules, 1962. It is filed by a non-resident (foreign company or individual) to claim treaty benefits under a Double Taxation Avoidance Agreement (DTAA) when the Tax Residency Certificate (TRC) does not contain all the required information mandated by Section 90(5) of the Income Tax Act, 1961.

For UAE-based companies receiving royalty payments or Fees for Technical Services (FTS) from Indian entities, filing Form 10F is a mandatory prerequisite to avail the 10% reduced withholding tax rate under the India-UAE DTAA. Without Form 10F, the Indian payer is required to deduct TDS at 20% + surcharge + cess under Section 115A — which can significantly increase the tax burden.

The Central Board of Direct Taxes (CBDT) made electronic filing of Form 10F mandatory from November 2022 onwards. This means UAE companies must have an active Indian income tax login to file it — a step many foreign entities overlook until it's too late.

UAE-India DTAA: Royalty and FTS Tax Rates at a Glance

The India-UAE DTAA (formally the Agreement for Avoidance of Double Taxation between India and the United Arab Emirates) provides significant tax relief on passive income such as royalties and FTS. Here is a comparison of applicable rates:

Scenario	Applicable Section / Treaty	TDS / Withholding Rate
Royalty without DTAA benefit	Section 115A, Income Tax Act	20% + Surcharge + Cess
Royalty with UAE-India DTAA benefit	India-UAE DTAA	10%
FTS without DTAA benefit	Section 115A, Income Tax Act	20% + Surcharge + Cess
FTS with UAE-India DTAA benefit	India-UAE DTAA	10%

Important Note: If the UAE company chooses not to claim DTAA benefit and pays tax under Section 115A, it does not need to file an ITR in India. However, if it claims the DTAA benefit, filing an ITR becomes mandatory.

What Documents Are Required to Claim DTAA Benefits on Royalty Payments?

To successfully claim the 10% DTAA rate on royalty or FTS income from India, a UAE company must arrange all of the following:

1. Tax Residency Certificate (TRC)

A TRC is issued by the UAE tax authority (the Federal Tax Authority) and certifies that the company is a tax resident of the UAE. This is the foundational document for any DTAA claim. It must be valid for the relevant financial year in which the income is received.

2. Form 10F

This self-declaration form must be filed electronically on India's income tax portal. It supplements the TRC by providing information such as the taxpayer's status, nationality, tax identification number, and the period for which the TRC is valid. Since electronic filing is now mandatory, the UAE company must have an active income tax login to file it.

3. No Permanent Establishment (No PE) Declaration

This is a letter/declaration from the UAE company stating that it does not have a Permanent Establishment (PE) in India. If a PE exists, the income attributable to it would be taxable in India at normal corporate rates regardless of the DTAA. This declaration is typically submitted to the Indian payer before they remit the payment.

4. PAN Card (Permanent Account Number)

A PAN is required to create an income tax login in India, which is necessary for filing Form 10F electronically and for filing the ITR (if DTAA benefit is claimed). Applying for a PAN as a foreign company involves submitting Form 49AA along with identity and address proof documents.

5. Income Tax Login on the Indian Portal

Once the PAN is obtained, the UAE company must register on India's income tax e-filing portal (incometax.gov.in). This login is mandatory for electronic filing of Form 10F and any future ITR filings in India.

6. DSC of the Authorised Foreign Signatory

A Digital Signature Certificate (DSC) of the authorised signatory of the UAE company is required to file documents on the Indian income tax portal. Note: A regular DSC of a director or partner does not suffice here. An organisational DSC specifically tied to the authorised signatory of the foreign entity is required.

To obtain the DSC for a foreign individual (the authorised signatory), the following are needed:

• Email OTP and phone OTP from the foreign individual
• Video verification of the foreign individual
• Address proof (such as a driving licence)
• Photograph
• Copy of passport

Step-by-Step Process: How to Comply with Form 10F Requirements for UAE-India Royalty Payments

The compliance process for a UAE company receiving royalty from India involves several sequential steps. Missing any one of them can result in the Indian payer deducting TDS at the higher rate of 20% + surcharge + cess.

1. Obtain TRC from UAE Federal Tax Authority for the relevant financial year
2. Apply for PAN in India using Form 49AA (for foreign entities)
3. Register on incometax.gov.in using the PAN to create an income tax login
4. Obtain DSC of the authorised foreign signatory of the UAE company
5. File Form 10F electronically on the income tax portal before the royalty payment is made
6. Issue a No PE Declaration to the Indian payer
7. Submit TRC, Form 10F, and No PE Declaration to the Indian payer so they can deduct TDS at 10%
8. File ITR in India (mandatory if DTAA benefit is claimed)

Each step has its own timeline, document requirements, and potential bottlenecks — especially when dealing with foreign signatories for DSC procurement and video verification processes.

What Happens If Form 10F Is Not Filed?

If the UAE company fails to file Form 10F or does not submit the required documents to the Indian payer, the Indian entity is legally obligated to deduct TDS at 20% + applicable surcharge + cess under Section 115A of the Income Tax Act. This is significantly higher than the 10% rate available under the UAE-India DTAA.

Additionally, the Indian payer may face penalties under Section 201 for short deduction of TDS if it incorrectly applies the DTAA rate without receiving the mandatory documentation from the foreign payee.

It is important to note that the DTAA benefit is not automatic — it must be actively claimed by submitting the correct documentation in the prescribed format and within the right timelines.

ITR Filing Obligation for UAE Companies Earning Royalty from India

There is a key distinction that many UAE companies miss:

• If paying tax under Section 115A only (no DTAA benefit claimed): No ITR filing is required in India. The Indian payer deducts TDS at 20% + surcharge + cess, and the UAE company's Indian tax obligation is discharged.
• If claiming DTAA benefit (10% rate): The UAE company must file an ITR in India. This requires an active PAN, income tax login, and DSC of the authorised signatory.

This makes it essential to plan the compliance strategy in advance: if the royalty payments are regular and substantial, claiming DTAA benefits (and filing ITR) results in significant tax savings despite the additional compliance effort.

Key Takeaways: Form 10F for UAE-India Royalty Payments

1. UAE-India DTAA reduces royalty withholding tax from 20% (Section 115A) to 10%
2. Form 10F must be filed electronically — this requires a PAN, income tax login, and DSC
3. A Tax Residency Certificate (TRC) from the UAE Federal Tax Authority is mandatory
4. A No PE Declaration must be issued to the Indian payer before each remittance
5. Claiming DTAA benefits triggers mandatory ITR filing in India
6. The DSC required is an organisational DSC of the foreign authorised signatory — not a regular individual DSC
7. Non-compliance means TDS at 20% + surcharge + cess with no refund without filing an ITR

How Taxocity Helps UAE Companies with Form 10F and DTAA Compliance

Taxocity has been providing end-to-end tax and compliance services since 1975, with a 4.8/5 rating from 5,000+ clients. For UAE companies receiving royalty or FTS income from India, Taxocity offers complete DTAA compliance support including:

• PAN application for foreign entities (Form 49AA)
• Income tax login creation on the Indian portal
• DSC procurement for foreign authorised signatories (including video verification coordination)
• Electronic filing of Form 10F
• Drafting of No PE Declarations
• ITR filing for foreign companies with India-sourced royalty income
• Ongoing TDS compliance advisory for Indian payers

With real human experts handling your case and a 100% compliance guarantee, Taxocity ensures that every document is accurate, filed on time, and in line with the latest CBDT guidelines — so you capture the full benefit of the UAE-India DTAA without any compliance gaps.

You may also want to explore our related services:

• GST Registration for foreign companies with Indian operations
• GST Filing services
• Private Limited Company Registration in India

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Disclaimer: The content on this page is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws are subject to change, and individual circumstances vary. Please consult a qualified tax advisor or chartered accountant before making any decisions based on this information. Taxocity recommends seeking professional guidance for your specific situation.