Service ID: V13-SVC-001 Direct Regulatory Service Foreign Exchange Management Act, 1999 (FEMA)

Cross-Border Technology Transfer & Licensing Agreements

Structuring cross-border technology licensing, intellectual property assignments, and technical services agreements between Indian entities and overseas parents/partners, ensuring optimal withholding tax rates under DTAA treaties and zero FEMA contraventions.

Statutory Authority

Foreign Exchange Management Act, 1999 (FEMA) & Section 9(1)(vi) of Income-tax Act, 1961 read with Double Taxation Avoidance Agreements (DTAA)

Governing Jurisdiction

Republic of India (Central Portal)

Execution SLA

3 to 5 Business Days

Why This Statutory Filing Is Required

Structuring cross-border technology licensing, intellectual property assignments, and technical services agreements between Indian entities and overseas parents/partners, ensuring optimal withholding tax rates under DTAA treaties and zero FEMA contraventions.

Statutory Mandate: Foreign Exchange Management Act, 1999 (FEMA) & Section 9(1)(vi) of Income-tax Act, 1961 read with Double Taxation Avoidance Agreements (DTAA)

Who This Service Is For & Statutory Eligibility

Indian technology subsidiaries licensing software from foreign parent companies, Indian developers exporting IP licenses globally, and joint ventures entering into technical collaboration agreements.

Prerequisites & Mandatory Documents Checklist

  • Detailed description of technology, source code, patent, or proprietary know-how being transferred
  • Licensing parameters (exclusive vs non-exclusive, territorial scope, sub-licensing rights, term)
  • Commercial consideration model (upfront licensing fee, running royalties, milestone payments)
  • Tax Residency Certificate (TRC) and Form 10F of overseas licensor for DTAA treaty benefits
  • Withholding tax (TDS) rate analysis under Section 195 vs applicable Double Tax Avoidance Agreement
  • Authorised Dealer (AD Bank) documentation guidelines for outward foreign exchange remittance

Step-by-Step Portal Execution Procedure

  1. Step 1: Conduct transactional tax review to categorize payments (Royalty vs Fees for Technical Services vs Business Profits)
  2. Step 2: Reconcile DTAA treaty benefits and verify Supreme Court Engineering Analysis ruling on software payments
  3. Step 3: Draft Technology Transfer Agreement / Master Software License with comprehensive IP warranties
  4. Step 4: Obtain Tax Residency Certificate (TRC), Form 10F, and No-PE (Permanent Establishment) declaration from foreign licensor
  5. Step 5: Obtain Form 15CA (taxpayer filing) and Form 15CB (Chartered Accountant certification) on Income Tax Portal
  6. Step 6: Submit outward remittance pack to Authorised Dealer (AD) Bank for cross-border foreign exchange transfer

Transparent Pricing & Statutory Cost Architecture

Calibrated Fixed Fee

Cross-Border Technology Transfer & Licensing Agreements

₹20,999 All Inclusive

Calibrated at 9% below prevailing market fee (₹23,000). Complete professional drafting, compilation, verification, and portal upload.

  • Independent Chartered Accountant / Company Secretary Verification
  • Electronic Form Pre-Scrutiny & Error Reconciliation
  • Digitally Signed Portal Upload with SRN Acknowledgement Delivery
Initiate Filing →

Government Fees & Disbursements

Government Statutory Fee: ₹0 (NIL) on regulatory portals; standard AD Bank wire transfer transaction fees apply.

Statutory Penalties for Non-Compliance

Failure to withhold appropriate tax under Section 195 triggers disallowance of the entire technology expenditure under Section 40(a)(i), along with mandatory 100% penalty under Section 271C and 1% per month interest under Section 201(1A). Contravention of FEMA remittance regulations triggers 3x compounding penalties under Section 15.

Dedicated operational desk: Alappuzha, Kerala • Pan-India MCA V3 / Income Tax / GST e-Filing Infrastructure.

Frequently Asked Questions

Is royalty paid for standard off-the-shelf foreign software subject to withholding tax in India?
Following the landmark Supreme Court ruling in Engineering Analysis Centre of Excellence, payment by Indian end-users for shrink-wrapped or off-the-shelf software is not taxable as royalty, exempting it from Section 195 TDS when DTAA benefits apply.
What is the requirement for Form 15CA and 15CB?
Form 15CB is a statutory certificate from a Chartered Accountant verifying tax withholding rates, which is then submitted alongside Form 15CA on the Income Tax Portal prior to making an overseas remittance through an AD Bank.