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Witnot · Oct 1, 2013, 02:38 PM

An entertainment production company in India has agreed to license my entertainment act for a specific annual sum to be paid quarterly. They produce and maintain the whole show only using the images and name of my act to promote their show. When the wired an installment to me I was told that there would be a 20% Indian government tax that must be paid by me. Subsequently, from a $2500 payment I received $2000. This seems backward, Doesn't the Indian company pay the taxes on this transaction?

AtlantaTaxExpert · Oct 1, 2013, 06:11 PM

Actually, a 20% tax payment is about right. The income is considered to be earned INSIDE the country of India, so the Indian government is within its rights to tax that income and require a set amount (in this case 20%) be withheld from the payment to you.

If the situation was reversed, the U.S. government wold require a 30% withholding.

Witnot · Oct 2, 2013, 05:25 AM

Originally Posted by AtlantaTaxExpert

Actually, a 20% tax payment is about right. The income is considered to be earned INSIDE the country of India, so the Indian government is within its rights to tax that income and require a set amount (in this case 20%) be withheld from the payment to you.

If the situation was reversed, the U.S. government wold require a 30% withholding.

Thanks for you answer. Is there any kind of documentation I should receive to show this withholding?

AtlantaTaxExpert · Oct 2, 2013, 06:30 AM

Yes, you should get a statement that shows what was paid and what was withheld.

Witnot · Oct 2, 2013, 06:34 AM

Would that be from the Indian government or from the company issuing the payment?
Thanks for your answers! I'm definitely going to recommend this community.

AtlantaTaxExpert · Oct 2, 2013, 08:24 AM

Logically, from the company. At least that is how it is done in the U.S.

Witnot · Oct 2, 2013, 08:27 AM

Thanks for the advice.

AtlantaTaxExpert · Oct 2, 2013, 09:22 AM

Glad to help!