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General Overview:
Any individual who is a non-resident of India, as per Indian IT law, should obtain a Tax
Residency Certificate from the country’s government or the territory of which he/she
claims to be a resident. This TRC has to contain the following details, namely:-
1. Taxpayer’s name
2. Taxpayer status (firm, company, individual etc.)
3. Nationality or specified territory/country of incorporation (in case of a LLP,
company or Firm) or registration
4. Taxpayer's tax ID number
5. Residential status
6. Certificate validity period and
7. Taxpayer address for the time period in which the certificate is applicable;
Opinion
Process to Obtain TRC in US
Step 1 - Use Form 8802 to request Form 6166, a letter of U.S. residency certification for
purposes of claiming benefits under an income tax treaty or value added tax (VAT)
exemption.
Step 2 – Fill Form 8802 that can be found in the following link -
https://www.irs.gov/forms-pubs/about-form-8802 (Also attached in Annexure I)
Along with it Instructions for form 8802 in attached in Annexure II for your reference.
Step 3 – Pay the mentioned User Fee for $85. After you have received your electronic
payment confirmation number, and entered it on page 1 of Form 8802, you can submit
Form 8802 and all required attachments by mail, private delivery service, or fax (see
below for limitations on the use of faxed transmissions).
If you are paying the user fee by e-payment, send Form 8802 and all required
attachments to:
Department of the Treasury
Internal Revenue Service
Philadelphia, PA 19255-0625
Or, by private delivery service to:
Internal Revenue Service
2970 Market Street
BLN# 3-E08.123
Philadelphia, PA 19104-5016
Fax.
You can fax up to 10 Forms 8802 (including all required attachments) for a maximum of
100 pages to the fax numbers below. You must use a fax cover sheet stating the
number of pages included in the transmission.
The following fax numbers are available..
877-824-9110 (within the United States only, toll free).
304-707-9792 (inside or outside the United States, not toll free).
You may have incomes from more than one country. Such incomes may be taxable in
both countries due to their domestic laws even though you are a tax resident in only one
of those countries. Thus, to avoid paying such double taxes on the same income in both
the source country and country of residence, double taxation avoidance agreements
(“DTAA”) (otherwise known as tax treaties) are entered between various countries.
Such agreements offer the taxpayers the benefit of tax paid in the other country with
which it has a tax treaty.
The Indian government has various DTAA with various countries. These tax treaty
provisions apply only to residents of those countries which are parties to such tax
treaties. Therefore, it becomes pertinent to confirm which country the person is a tax
resident of. One of the main pieces of documentary evidence to establish tax residency
and support eligibility for a DTAA relief claim is a tax residency certificate (“TRC”).
Opinion
Once the Tax Residency Certificate is obtained the assessee can avail the benefit of not
filing the income tax return in India and avoid double taxation of the same provided, he
is filing the taxes in the foreign country of which TRC has been obtained.