To claim the benefit of the Denmark-India DTAA on royalty payments, the foreign payee must submit Form 10F along with a Tax Residency Certificate (TRC) and a No Permanent Establishment (No PE) Declaration. Without Form 10F, the Indian payer must deduct TDS at 20% under Section 115A (plus applicable surcharge and cess). The Denmark-India DTAA caps the royalty withholding rate at 20% — meaning the treaty rate and the domestic Section 115A rate are the same; however, compliance with DTAA formalities is still mandatory to avoid disputes and penalties.

• Denmark-India DTAA royalty rate: 20%
• Section 115A domestic rate: 20% + surcharge + cess
• Form 10F, TRC, No PE Declaration, and PAN are all mandatory to invoke DTAA benefits
• Non-compliance can lead to higher TDS demands, penalty, and disallowance of DTAA protection

What is Form 10F?

Form 10F is a self-declaration form prescribed under Rule 21AB of the Income Tax Rules, 1962, read with Section 90(5) of the Income Tax Act, 1961. It is filed by a non-resident taxpayer to supplement the Tax Residency Certificate (TRC) where the TRC does not contain all the information required under the Indian income tax rules.

Since 1 September 2023, the Income Tax Department mandates that Form 10F must be filed electronically on the Indian income tax portal. This requires the foreign entity to obtain a PAN in India and create an income tax login — making it an integral part of the DTAA claim process for Danish companies receiving royalties from India.

Denmark-India DTAA: Royalty Withholding Rate

India and Denmark signed their Double Taxation Avoidance Agreement (DTAA), which governs how royalty income is taxed when paid from India to Denmark. Under the treaty, the royalty withholding rate applicable between Denmark and India is 20%.

Provision	Rate	Applicability
Denmark-India DTAA (Royalties)	20%	Where DTAA formalities (Form 10F, TRC, No PE) are fulfilled
Section 115A (Domestic Law)	20% + Surcharge + Cess	Where DTAA benefit is not claimed or formalities are not met
Section 195 (General TDS)	Rates in force	If no DTAA claim is made and Section 115A does not apply

Although the DTAA royalty rate (20%) and Section 115A rate (20%) appear identical, invoking the DTAA still matters. DTAA protection shields the Danish company from higher interpretive tax demands, surcharge, and cess that would apply under pure domestic law, and it establishes a treaty-based right that is legally more protective than a domestic provision alone.

When is Form 10F Required for Royalty Payments?

Form 10F is required whenever a Danish company (or any non-resident) wants to invoke the protection of the Denmark-India DTAA on royalty income received from an Indian payer. Specifically, it is required when:

• The Tax Residency Certificate (TRC) issued by Danish tax authorities does not include all prescribed details (such as address, status, tax identification number, or the period of residency).
• The Danish entity wants to furnish the missing information in a standardized format acceptable to Indian tax authorities.
• The Indian payer (the deductor) needs documentary evidence to justify a lower TDS rate or treaty-rate deduction.
• The Danish company has to file an Income Tax Return in India after benefiting from the DTAA.

In practice, virtually every royalty payment from India to Denmark will require Form 10F, since Indian payors are required to verify treaty eligibility before applying the DTAA rate.

Complete List of Documents Required

To successfully claim the Denmark-India DTAA benefit on royalty payments, the Danish company must assemble the following documents:

Document	Issued By	Purpose
Tax Residency Certificate (TRC)	Danish Tax Authority (Skattestyrelsen)	Proves Danish tax residency; primary DTAA eligibility document
Form 10F	Filed online on Indian IT portal by foreign company	Supplements TRC with required information per Rule 21AB
No PE Declaration	Authorized signatory of Danish company	Declares no Permanent Establishment in India
PAN (Permanent Account Number)	Indian Income Tax Department	Required to file Form 10F online and ITR in India
Income Tax Login (Indian portal)	Indian IT Department (using PAN)	Portal access to file Form 10F and ITR
Digital Signature Certificate (DSC)	Licensed Certifying Authority	Required to electronically sign Form 10F and ITR filings

DSC Requirement for Foreign Signatories

One of the most complex requirements for Danish companies is obtaining a Digital Signature Certificate (DSC) for the foreign authorized signatory. Note that a regular DSC of a director or partner will not work for this purpose — an organisational DSC in the name of the authorized signatory of the foreign entity is mandatory.

To obtain the DSC for a foreign director or authorized signatory of the Danish company, the following is required:

• Email OTP and phone OTP from the foreign individual
• Video verification of the foreign individual (conducted by the Certifying Authority)
• Address proof (such as a Driving License or equivalent document)
• Recent photograph
• Copy of valid passport

This DSC is used to electronically sign the ITR filing in India, which is mandatory if the Danish company has claimed DTAA benefits on its Indian-sourced royalty income.

How to File Form 10F Online: Step-by-Step

Since September 2023, Form 10F must be filed electronically on the Indian Income Tax e-filing portal. Here is the complete process:

1. Apply for PAN in India: The Danish company must first apply for a Permanent Account Number (PAN) from the Indian Income Tax Department. This is the foundational step for all subsequent filings.
2. Create an Income Tax Login: Once PAN is allotted, use it to register on the Indian income tax e-filing portal (incometax.gov.in). This login is essential for all electronic filings.
3. Obtain TRC from Danish Tax Authorities: The Danish company should apply to Skattestyrelsen (the Danish Tax Agency) for a Tax Residency Certificate for the relevant financial year.
4. Obtain DSC of Authorized Signatory: Procure the Digital Signature Certificate of the foreign authorized signatory (see requirements above).
5. Log in and File Form 10F: Log in to the Indian IT portal using the PAN credentials, navigate to the "Forms" section, select Form 10F, fill in all required details (name, status, nationality, TIN, period of residency, address), and submit electronically using the DSC.
6. Share Form 10F with Indian Payer: Provide the filed and acknowledged Form 10F, TRC, and No PE Declaration to the Indian company making the royalty payment. The Indian payer will use these documents to justify the DTAA rate when deducting TDS.
7. File ITR in India (if DTAA benefit is claimed): If the Danish company has claimed DTAA benefits, it is mandatory to file an Income Tax Return in India. This requires the DSC of the authorized signatory for electronic signing.

Section 115A vs DTAA: Which Rate Applies?

Section 115A of the Income Tax Act, 1961 prescribes a flat rate of 20% (plus applicable surcharge and cess) for royalties and fees for technical services (FTS) paid to foreign companies, where no DTAA is invoked. For royalty payments to Denmark:

• Under Section 115A: 20% + Surcharge + Cess (effective rate can be higher depending on the quantum of income)
• Under Denmark-India DTAA: 20% (base rate, without additional surcharge and cess in most interpretations when DTAA protection applies)
• If Section 115A is used (and ITR is not filed), the Indian payer deducts at 20% + surcharge + cess, and the foreign company is not required to file an ITR in India for that specific payment — but if the DTAA benefit is claimed, filing ITR becomes mandatory

For Danish companies with recurring royalty income from India, using the DTAA route with proper documentation (Form 10F, TRC, No PE Declaration) is advisable for treaty protection and legal certainty, even where the headline rate is the same.

Consequences of Not Filing Form 10F

Failure to submit Form 10F and the associated documents can have serious consequences for both the Indian payer and the Danish payee:

• Higher TDS deduction: The Indian company is required to deduct TDS at the domestic rate (20% + surcharge + cess under Section 115A) rather than the treaty rate.
• Disallowance of DTAA benefit: During assessments, the Income Tax Officer may disallow the reduced treaty rate and raise a demand for the differential amount.
• Penalty on Indian payer: If the Indian company fails to deduct the correct TDS, it may face interest under Sections 201(1) and 201(1A) and penalties.
• Litigation risk: Absence of Form 10F can trigger prolonged tax disputes for both parties.

How Taxocity Helps with DTAA Compliance

Taxocity has been a trusted partner for businesses navigating cross-border tax compliance since 1975, with a 4.8/5 rating from 5,000+ reviews. Our team of real human experts provides end-to-end support for Denmark-India DTAA compliance, including:

• Advising on royalty structuring and applicable DTAA rates
• Applying for PAN for the Danish company in India
• Setting up the Indian income tax login and DSC of the foreign authorized signatory
• Filing Form 10F electronically on the Indian IT portal
• Drafting No PE Declarations and coordinating TRC applications
• Filing the mandatory Income Tax Return in India for the foreign entity
• Ensuring 100% compliance and documentation readiness for assessments

We also assist Indian companies making royalty payments to Denmark in verifying treaty documentation, deducting correct TDS, and filing TDS returns accurately. Our GST Registration, GST Filing, and broader corporate compliance services make us a single point of contact for all your business obligations in India.

Key Takeaways

1. Form 10F is mandatory for Danish companies to claim DTAA benefits on royalty income from India.
2. Denmark-India DTAA royalty rate is 20%; Section 115A domestic rate is 20% + surcharge + cess.
3. Form 10F must be filed electronically on the Indian IT portal since September 2023.
4. Filing requires: PAN, income tax login, TRC from Danish authorities, organisational DSC of foreign authorized signatory, and No PE Declaration.
5. If DTAA benefit is claimed, the Danish company must file an ITR in India — which requires a DSC of the authorized signatory.
6. For the DSC, the foreign signatory must provide email/phone OTP, video verification, address proof, photo, and passport copy.
7. Non-compliance results in higher TDS, potential penalties, and DTAA benefit disallowance.

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute tax advice, legal advice, or professional consultation. Tax laws and treaty provisions are subject to change. Please consult a qualified tax advisor or chartered accountant before making any decisions related to DTAA compliance, Form 10F filing, or royalty payments. Taxocity is not liable for any actions taken based on the information provided herein.