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Old 02-05-2014, 04:10 AM
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Join Date: Feb 2014
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Exclamation Opinion required

Hi,

Sir I have Question regarding below scenario

There is inter-company in UAE callled as (A) whose major holding company is in US. Another company in UAE called as (B) whose head office is also in US . The Company B requires the Company A to provide lab related service and they entered in to agreement but the Company A further give that work to its further inter-company Norway branch called as (C) and C performed entire work is entirely performed in Norway. Now Norway inter-company invoice its UAE inter-company A and Company A further invoice the work performed to the head office of company B in US instead of invoicing the Company B in UAE just as per term and condition of contract.


Now my simple question is what will be tax implication if Company A of UAE but having parent company is US invoice the US head office of company B .


1. Do the Us Head office of Company B withhold tax if it made payment to Company A. , keeping in view that entire work was performed in Norway by Norway Inter-Company of Company A?

2. If the tax will be applicable then what will be the rate of tax on performing services and will also appreciate your providing the section of US tax law, If liable to be withheld?

I may add that in my opinion since work was exclusively performed outside the US therefore, Company A is liable to pay any tax. However your view in this regard is required and will be highly appreciated.

Regards



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