India, Norway sign an agreement on double taxation avoidance and prevention of fiscal evasion
February 2nd, 2011 - 10:06 pm ICT by ANI
New Delhi, Feb 2 (ANI): Union Finance Minister Pranab Mukherjee and Norwegian Minister of Research and Higher Education Tora Aasland signed an agreement here on Wednesday for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income and on capital (DTAA).
This will replace the existing Convention signed between the two countries on the same subject on December 31, 1986.
Speaking on the occasion, Pranab Mukherjee said that it is a matter of happiness that the two countries have signed the revised agreement for the avoidance of double taxation and avoidance of fiscal avoidance after 25 years.
He hoped that this will bring out more transparency and openness in both taxation and fiscal matters.
“India and Norway have good relations not only in the field of financial matters but also with regard to climate change, water resources and research among others,” said Tora Aasland.
Both India and Norway have renegotiated the new agreement. The renegotiated DTAA was approved by the Cabinet in its meeting held on October, 20, 2010. The new DTAA will replace the existing DTAC upon entering into force.
The salient features of the renegotiated DTAA are:
1. In the Article concerning “Residence”, the new DTAA allow the place of effective management of an entity to be determined through Mutual Agreement Procedure in case it cannot be determined otherwise. This provision is not there in existing DTAC.
2. New DTAA also has provision for insurance PE, which was not in existing DTAC.
3. The Article on “Associated Enterprise” in the new DTAA has paragraph 2, which is not in the existing DTAC. This paragraph will enable us to resolve Transfer Pricing cases under Mutual Agreement Procedure.
4. The new DTAA provide for lesser rate of taxation of dividend and interest in the source country. It provides for 10% rate as against 15% or 25% in existing DTAC.
5. New DTAA has removed limited tax sparring contained in the Article on “Method for Elimination of Double Taxation”. This is in line with our new tax policy.
6. The new DTAA has an article on exchange of Information, which specifically provide for exchange of banking information and information without domestic interest. These two paragraphs (paragraphs 4 and 5) are missing in the existing DTAC. Hence, the new DTAA, which contains these paragraphs, is in line with the international standards.
7. The new DTAA has an article on Limitation of Benefit, which is not in existing DTAC. This will prevent misuse of DTAA. (ANI)
- India, Australia amend tax treaty - Dec 16, 2011
- India, Colombia sign double tax avoidance treaty - May 13, 2011
- India, Georgia sign double tax avoidance treaty - Aug 24, 2011
- India renegotiating tax treaties to curb black money: Pranab - Sep 29, 2011
- India, Germany to revise tax treaty - Feb 21, 2011
- Ethiopia seeks more Indian investments - Feb 03, 2011
- India, Nepal sign revised tax treaty - Nov 27, 2011
- Five-fold strategy to deal with black money: Mukherjee - Feb 28, 2011
- India, Switzerland to amend tax agreement soon - Aug 23, 2011
- Pranab urges Switzerland to ratify taxation deal - Apr 07, 2011
- India to join new convention to fight black money - Nov 04, 2011
- Swiss Federal Councillor calls on Pranab Mukherjee - Apr 07, 2011
- Black money: India, Switzerland to share bank details - Mar 08, 2011
- India, Singapore to amend tax treaty - Jun 24, 2011
- India, Switzerland ink double taxation avoidance pact - Aug 30, 2010
Tags: change water, climate change, december 31, dividend, double taxation avoidance, dtac, effective management, feb 2, financial matters, fiscal evasion, fiscal matters, higher education, New Delhi, norwegian minister, openness, pranab mukherjee, salient features, source country, union finance minister, water resources