handbook-tb

Brian J. Arnolduse a non-final withholding tax as a collection device for taxes onincome from services derived by non-residents, although India is anexception in this regard. 34 Such a non-final withholding tax is creditableagainst the tax payable by the non-residents on a net basis whenthey file their tax returns and any excess withholding tax is refundableat that time. Non-final withholding taxes impose compliance burdenson taxpayers to file returns and resident payers to withhold, as wellas administrative burdens on tax officials to assess tax returns andrefund any amounts withheld in excess of the tax payable.In some countries the withholding tax is used as a means ofpolicing the deduction of payments to non-residents for services. Suchpayments may not be deductible unless tax is withheld or the payerprovides the tax authorities with prescribed information concerningthe non-resident and the payment. 35Final gross basis withholding taxes on payments for servicesare often restricted to certain types of services, such as entertainment,international transportation, insurance, professional services andtechnical services.The rates of final withholding taxes on income from servicesvary considerably from country to country depending on the typeof services. Rates are generally low (5 – 10 per cent) on payments forinternational transportation but can be as high as 35 per cent in someSouth American countries. The most common rate appears to be 15per cent. 36 As noted above, in some countries a relatively high rate of34See Saurav Bhattacharya and Dhaval Sanghavi, “India,” in InternationalFiscal Association, “Enterprise Services,” in Cahiers de droit fiscalinternational, supra note 7, at 362 – 63.35See Ariane Pickering, “General Report,” in International Fiscal Association,“Enterprise Services,” in Cahiers de droit fiscal international, supranote 7, at 35.36See, for technical services, Sergio André Rocha, “Brazil,” in InternationalFiscal Association, “Enterprise Services,” in Cahiers de droit fiscalinternational, supra note 7, at 157; and Sandra Benedetto and Liselott Kana,“Chile,” in International Fiscal Association, “Enterprise Services,” in Cahiersde droit fiscal international, supra note 7, at 194; see also, in general, LenkaFialkova, “Czech Republic,” in International Fiscal Association, “EnterpriseServices,” in Cahiers de droit fiscal international, supra note 7, at 259.62