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India and Kazakhstan sign Protocol to amend DTAC

India and Kazakhstan have signed a Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) between the two countries in New Delhi.

The DTAC between both countries was earlier signed in December 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.

Salient features of Protocol
  • Provides internationally accepted standards for effective exchange of information on tax matters. Further, allows tax authorities to share information with other law enforcement agencies with prior authorisation.
  • Limitation of Benefits Article has been inserted to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax evasion or avoidance.
  • Specific provisions to facilitate relieving of economic double taxation in transfer pricing cases also have been inserted.
  • It is a taxpayer friendly measure and is in line with India’s commitment under Base Erosion and Profit Shifting (BEPS) Action Plan to meet standards of Mutual Agreement Procedure (MAP) access in transfer pricing cases.
  • Service PE (PE provisions) provisions also have been inserted with a threshold and the profits to be attributed to PE will be determined on the basis of apportionment of total profits of the enterprise.
  • It replaces existing Article on Assistance in Collection of Taxes with a new Article in order to align it with international standards.

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India and Armenia sign Protocol amending the Double Taxation Avoidance Convention

India and Armenia has signed a Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) to curb instances of tax evasion.

The Protocol amends the Article on Exchange of Information for tax in the bilateral DTAC signed between India and Armenia and has been in existence since September 2004.

It has been amended to bring it in line with the updated provisions in the Organisation for Economic Co-operation and Development (OECD) Model.

Key facts

  • The amendment Protocol will enable both countries to exchange information related to banking and financial transactions under the DTAC.
  • It will facilitate them in addressing tax evasion and help to further strengthen the efforts of Indian Government’s to curb generation of black money.

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Union Cabinet approves DTAC agreement with Japan

Union Cabinet has approved signing and ratification of a protocol between India and Japan for amending the Double Taxation Avoidance Convention (DTAC).

It aims at avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

The protocol incorporates provisions for an effective exchange of information and assistance in collection of taxes between tax authorities of the two countries. It also includes exchange of banking information between tax authorities.

DTAC between both countries will facilitate:

  • Exchange of information on tax matters including bank information and information without domestic tax interest as per accepted international standards.
  • Sharing of any information received from Japan to Indian authority in respect of an Indian resident with other law enforcement agencies.
  • Offer assistance to each other in matters related to collection of revenue claims as well as for exemption of interest income from taxation in the source country.
  • In this regard the claim would be made with respect to debt claims insured by the government or government-owned financial institutions.

It should be noted that DTAC between India and Japan was signed in 1989 for avoidance of double taxation and prevention of fiscal evasion through a protocol.

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