Taxation Current Affairs - 2019

Category Wise PDF Compilations available at This Link

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.

Month: Categories: National

Tags:

India and Singapore ink 3rd Protocol for amending DTAA

India and Singapore have signed a Third Protocol to amend DTAA (Double Taxation Avoidance Agreement) for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.

It was signed in line with India’s treaty policy to prevent double non-taxation, curb revenue loss and check the menace of black money through automatic exchange of information.

Key Facts
  • The Third Protocol amends DTAA to provide for source based taxation of capital gains arising on transfer of shares in a company.
  • It will come into effect from April 1, 2017 to provide for source based taxation of capital gains arising on transfer of shares in a company.
  • It also inserts provisions to facilitate relieving of economic double taxation in transfer pricing cases. It also enables application of domestic law and measures concerning prevention of tax avoidance or tax evasion.
  • This is a taxpayer friendly measure and is in line with India’s commitments under Base Erosion and Profit Shifting (BEPS) Action Plan to meet minimum standard of providing MAP access in transfer pricing cases.
  • Two year transition period from April 1, 2017 to March 31, 2019 has been provided during which capital gains on shares will be taxed in source country at half of normal tax rate.

Month: Categories: Business, Economy & Banking

Tags: