Directors Fees – Article 16 – OECD Model tax Convention
Taxation of Director’s Fees – Article 16
Article 16 – India USA Treaty
Directors’ fees and similar payments
derived by a resident of a Contracting State
in his capacity
as a member of the Board of Directors of a company which is a resident of the other Contracting State
may be taxed in that other State.
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Article 16 – Issue For Consideration
What should be derived ?
Directors’ fees and similar payments
Who should derive ?
Resident of the other Contracting State
In what capacity ?
Member of BOD of a company which is a resident of the other Contracting State
Who has the right to tax ?
India also has the right to tax such income
Meaning of Director’s Fees and Other Similar Payments – Article 16
Includes benefits in kind use of residence or vehicle, Stock option, Insurance coverage, Club memberships etc.
Director in Dual Capacity
Fees taxable Article 16 – $ 100
Fees taxable Article 15 – $ 10,000
Fees taxable Article 14 – $ 20,000
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Taxation of Top Level Managerial Remuneration – Directors Fees Article 16 – OECD Model tax Convention
Salaries, wages and other similar remuneration
derived by a resident of a Contracting State
in his capacity as an official in a top-level managerial position
of a company which is a resident of other Contracting State
may be taxed in that other State.
If there are no corresponding provision, income taxable under Dependent or Independent Personal Services clause
Characteristics
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