Withholding Tax Rates: India to Greece Under DTAA

India to Greece Withholding Tax Rates Under the DTAA

When an Indian entity makes payments to a Greek resident — dividends, interest, royalties, or fees for technical services — withholding tax is deducted under section 393(2) of the Income-tax Act, 2025 (Table, Sl. No. 17; section 195 of the Income-tax Act, 1961). Unlike most of India's DTAA network, the 1965 India-Greece Agreement gives none of these four income categories a reduced treaty rate. Article VIII, Article IX and Article VII allocate dividends, interest and royalties exclusively to India as the source state without capping the rate, and there is no article at all for fees for technical services. The comparison in section 159(4) of the Income-tax Act, 2025 (section 90(2) of the Income-tax Act, 1961) between the domestic rate and the treaty rate therefore resolves, on every one of these heads, in favour of the domestic rate — because the treaty sets none.

Dividend Withholding — No Treaty Cap

Article VIII states: "Dividends paid by a company which is a resident of one of the territories to a resident of the other territory may be taxed only in the first-mentioned territory" — the first-mentioned territory being the payer company's state, i.e. the source state. There is no percentage figure anywhere in the Article.

An Indian company therefore withholds at the full domestic rate of 20% under section 207(1) (Table, Sl. No. 1) of the Income-tax Act, 2025 (section 115A of the Income-tax Act, 1961), regardless of how large the Greek shareholder's stake is. The offsetting relief sits on the Greek side: because Article VIII gives India the exclusive right to tax the dividend "in accordance with this Agreement," Article XVII(3) then obliges Greece to exempt it from Greek tax entirely. Do not read any 0%, 10% or 15% figure into this Article — none exists.

Interest Withholding — No Treaty Cap, No Exemption Limbs

Article IX is a single unnumbered sentence: "Interest on bonds, securities, notes, debentures or any other form of indebtedness derived by a resident of one of the territories from sources in the other territory may be taxed only in that other territory" — again, the source territory.

Several of India's newer treaties — with Germany, Denmark or Norway among them — exempt interest paid to the other state's government, central bank or specified financial institutions. Article IX has no such clause. It is the entire content of the Article: one sentence, with nothing else attached. Foreign-currency interest paid to a Greek resident by the Government of India or an Indian concern is taxed at 20% under section 207(1) (Table, Sl. No. 3) of the Income-tax Act, 2025; rupee-denominated interest that does not fall within that item is taxed at the rates in force under section 393(2). Neither figure is reduced by the treaty.

Royalty Withholding and the Mining-Royalty Carve-Out

Article VII gives India the same exclusive, uncapped source right over royalties: "Royalties derived by a resident of one of the territories from sources in the other territory may be taxed only in that other territory." The Article defines royalty narrowly — "any royalty or other like amount received as consideration for the right to use copyrights, artistic or scientific works, cinematographic films, patents, models, designs, plans, secret processes or formulae, trade marks and other like property or rights" — and expressly excludes "any royalty or other like amount in respect of the operation of mines, quarries or other natural resources."

India therefore withholds 20% on ordinary royalties under section 207(2) (Table, Sl. No. 1) of the Income-tax Act, 2025 (section 115A of the Income-tax Act, 1961). A payment for the right to extract minerals, however, is routed to Article X's situs rule rather than Article VII — it is not a "royalty" under this treaty at all, though the practical result for an India-situated resource is the same: India, as the situs state, taxes it.

Fees for Technical Services — No Treaty Article At All

This treaty has no fees-for-technical-services article. There is no combined royalty-and-FTS clause, no "make available" test and no residual "other income" article of the kind that catches unallocated income in modern treaties. Article III(3) expressly excludes "management charges" and "remuneration for labour or personal services" from industrial or commercial profits, so the treaty's business-profits article does not reach them either.

With no article assigning the right to tax fees for technical services, Article XVII(1) falls back on ordinary domestic law: "the laws in force in either of the territories will continue to govern the assessment and taxation of income … except where express provision to the contrary is made in this Agreement." India accordingly withholds the full domestic rate of 20% under section 207(2) (Table, Sl. No. 2) of the Income-tax Act, 2025 where the fee is not effectively connected with an Indian permanent establishment, and no treaty comparison under section 159(4) can produce a lower figure, because there is no treaty rate to compare it with.

The Permanent Establishment Trap: No "Effectively Connected" Carve-Out

Modern treaties typically push dividends, interest and royalties into ordinary business-profits taxation once they are "effectively connected" with a permanent establishment in the source state — usually at a higher net-basis rate. This treaty does the opposite. Article III(3) excludes rents, royalties, interest, dividends and management charges from "industrial or commercial profits" altogether, so no treaty article sweeps this passive income into PE-taxed business profits, no matter how closely it is connected to a PE. It stays governed by Article VIII, Article IX or Article VII (or, for management fees, by nothing at all) and continues to be taxed at India's ordinary domestic rate. The carve-out that does bite is a domestic one: section 207(2) reaches royalties and fees for technical services only "other than income referred to in section 59(1)", and section 59 of the Income-tax Act, 2025 (section 44DA of the Income-tax Act, 1961) computes royalties and technical-service fees effectively connected with an Indian permanent establishment as business profits on a net basis instead. Do not import an "effectively connected with a PE" carve-out from another India treaty when working with Greece — the treaty mechanism simply is not there.

How to Apply the Rates: TRC, Forms and Certificates

A Greek resident's entry point is a Tax Residency Certificate (TRC) from Greece's Independent Authority for Public Revenue (AADE). AADE's platform issues e-TRCs automatically in Greek and English, bearing an electronic seal, a Tax Identification Number and a reference number; where an apostille or Ministry of Foreign Affairs attestation is required instead, AADE still issues a paper certificate with a wet-ink signature. In India, the TRC must be paired with an electronically filed Form 41 (formerly Form 10F) before treaty analysis (such as it is) can be applied.

The Indian payer files Form 145 (formerly Form 15CA) before remitting the payment; a Chartered Accountant's certificate in Form 146 (formerly Form 15CB) is needed only where the taxable remittance exceeds INR 5 lakh and no section 395 certificate has been obtained. If there is doubt about the rate to withhold, the payee may apply to the Assessing Officer under section 395(1) of the Income-tax Act, 2025 (section 197 of the Income-tax Act, 1961) for a lower or nil-deduction certificate — though, because Articles VIII, IX and VII set no cap, this route only helps where the payee separately qualifies for a domestic-law exemption or a genuinely lower effective rate, not because the treaty itself offers one. A related-party transaction between Indian and Greek enterprises also requires a transfer-pricing accountant's report in Form 48 (formerly Form 3CEB).

Worked Examples

Dividend: An Indian company pays ₹50,00,000 in dividends to its Greek parent, which has no PE in India. Article VIII gives India the exclusive right to tax the dividend with no cap, so the Indian company withholds ₹10,00,000 (20% under section 207(1), Table, Sl. No. 1) plus applicable surcharge and cess, remitting the balance. Greece must exempt the full ₹50,00,000 under Article XVII(3).

Royalty: A Greek engineering firm licenses a patented process to an Indian manufacturer for a royalty of ₹20,00,000. Article VII gives India the exclusive right to tax the royalty with no cap, so the Indian company withholds ₹4,00,000 (20% under section 207(2), Table, Sl. No. 1) plus surcharge and cess. Had the same ₹20,00,000 instead been billed as a technical-service fee for engineers advising the Indian plant, the result is unchanged in rate terms — 20% under section 207(2) (Table, Sl. No. 2) — but the legal basis differs: it is taxed under India's unrestricted domestic charge because no treaty article covers fees for technical services at all.

Common Mistakes and Compliance Tips

Mistake 1: Assuming a reduced treaty rate exists

There is no 10%, 15% or any other reduced figure in Article VIII, Article IX or Article VII. Every dividend, interest and royalty payment to a Greek resident is withheld at India's full domestic rate of 20%.

Mistake 2: Importing another treaty's interest exemption

Article IX has no carve-out for government bodies, central banks or financial institutions of the kind found in India's treaties with Germany, Denmark or Norway. Do not apply one here.

Mistake 3: Treating FTS as a 10% or 20%-capped category

There is no FTS article. The 20% figure that applies comes entirely from India's domestic law under section 207(2) (Table, Sl. No. 2), not from any treaty rate.

Mistake 4: Assuming the treaty reroutes PE-connected income

Article III(3) keeps dividends, interest, royalties and management charges outside the treaty's "industrial or commercial profits", so no treaty article pushes them into business-profits taxation. India's domestic law is what changes the answer: royalties and fees for technical services effectively connected with an Indian permanent establishment fall outside section 207(2) and are computed as business profits on a net basis under section 59 of the Income-tax Act, 2025 (section 44DA of the Income-tax Act, 1961). Dividends and interest under section 207(1) carry no such carve-out.

Mistake 5: Expecting a lower-deduction certificate to beat the domestic rate

Because the treaty caps nothing, a section 395(1) certificate can only reflect a rate the payee is entitled to under domestic law — it cannot manufacture a treaty-based reduction that does not exist.

For the full picture of how this treaty allocates taxing rights, permanent establishment rules and relief method, see our complete guide to the India-Greece DTAA. For broader guidance on claiming treaty relief across India's tax treaties, see our DTAA master guide.

Frequently Asked Questions

What is the withholding tax rate on dividends from India to Greece?

There is no treaty cap. Article VIII gives India, as the source state, the exclusive right to tax dividends paid to a Greek resident, so the Indian company withholds at the full domestic rate of 20% under section 207(1) (Table, Sl. No. 1) of the Income-tax Act, 2025. Greece must then exempt the dividend from Greek tax under Article XVII(3).

Is there a reduced rate for interest paid to Greek banks or government bodies?

No. Unlike India's treaties with Germany, Denmark or Norway, Article IX of the India-Greece DTAA has no government, central-bank or financial-institution exemption of any kind. It is a single sentence giving India exclusive source-state taxing rights over interest, so every Greek-resident interest recipient is taxed at India's domestic rate, 20% on foreign-currency borrowings under section 207(1) (Table, Sl. No. 3).

What is the FTS rate under the India-Greece DTAA?

There is no FTS rate because there is no FTS article. The treaty has no fees-for-technical-services clause, no combined royalty-and-FTS provision and no residual income article. Article III(3) removes management charges and personal-service payments from business profits entirely. India therefore taxes fees for technical services at its full domestic rate of 20% under section 207(2) (Table, Sl. No. 2), with no treaty relief available.

Does having a permanent establishment in India change how dividends or interest paid to a Greek resident are taxed?

Not for dividends or interest. Article III(3) excludes them from 'industrial or commercial profits', so no treaty article reroutes them, and section 207(1) of the Income-tax Act, 2025 applies its 20% rate with no permanent-establishment carve-out. Royalties and fees for technical services are different: under section 59 of the Income-tax Act, 2025 (section 44DA of the Income-tax Act, 1961) those are computed as business profits on a net basis when effectively connected with an Indian permanent establishment.

What documents are needed to claim treaty benefits in India for payments to Greece?

The Greek recipient needs a Tax Residency Certificate from Greece's Independent Authority for Public Revenue (AADE), which issues e-TRCs automatically in Greek and English. The recipient must also electronically file Form 41 (formerly Form 10F). The Indian payer files Form 145 before remitting payment; a Chartered Accountant's certificate in Form 146 is needed only where the taxable remittance exceeds INR 5 lakh and no section 395 certificate has been obtained.

Can a Greek company get a lower withholding certificate for Indian-source dividends or royalties?

It can apply under section 395(1) of the Income-tax Act, 2025 (section 197 of the Income-tax Act, 1961), but because Article VIII, Article IX and Article VII set no treaty cap, there is normally no rate below India's domestic 20% for the Assessing Officer to certify. A lower-deduction certificate helps here only if the applicant separately qualifies for a domestic-law exemption, not a treaty one.