Equalisation Levy 5.97 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication d. Tax as per provisions of the Income-tax Act. • Apart from the above, individuals would need to consider implications of TCS on payments covered under the Liberalised Remittance Scheme under Section 206C(1G). (4) Collection and Recovery of Equalisation Levy 1. Specified services Payment of EL The Equalisation Levy so deducted during any calendar month shall be paid by the seventh day of the month immediately following the said calendar month by remitting into Reserve Bank of India, State Bank of India or any bank authorised for the purpose along with Equalisation Levy Challan. Failure to deduct Any assessee who fails to deduct the levy, be liable to pay the levy himself in addition to interest and penalty. 2. E-commerce supply or services Payment of EL The Equalisation Levy required to be paid by the e-commerce operator shall be deposited to the credit of the Indian treasury on a quarterly basis. Date of ending of the quarter of financial Due date of the financial year 30th June 7th July 30th September 7th October 31st December 7th January 31st March 31st March (5) Furnishing of statement Due date for statement Every assessee or E-commerce operator shall, by 30th June after the end of each financial year, prepare and deliver a statement in Form 1, duly verified in the manner indicated and furnished in the following manner:- i. Electronically under digital signature; or ii. Electronically through electronic verification code (6) Interest on delayed payment of Equalisation Levy Failure to pay the Equalisation Levy, shall be liable to pay simple interest at the rate of one per cent of such levy for every month or part of a month. (7) Penalty for failure to deduct or pay Equalisation Levy Any assessee or E-commerce operator who — Fails to deduct/pay the whole or any part of the Equalisation Levy will be liable to pay a penalty equal to the amount of Equalisation Levy that he failed to deduct/pay. Or after deducting, fails to pay, in addition to paying the levy and interest, a penalty of one thousand rupees for every day during which the failure continues, however, that the penalty under this clause shall not exceed the amount of Equalisation levy that he failed to pay. (8) Penalty for failure to furnish statement Where an assessee or E-commerce operator fails to furnish the statement within the time, shall be liable to pay a penalty of one hundred rupees for each day during which the failure continues. 2
FEMA and International Taxation 5.98 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication VI. Form 15CA/15CB As per Section 195 of Income tax Act, 1961, every person liable for making a payment to nonresidents shall deduct TDS from the payments made to non-residents if such sum is chargeable to Income tax and is required to furnish information relating to the payment in Form 15CA and 15CB as declaration for the same. A person making the remittance (a payment) to a Non-Resident or a Foreign Company has to submit the form 15CA. This form is submitted electronically. In some cases, a Certificate from Chartered Accountant in Form 15CB is also required. Requirement of filing these forms is diagrammatically summarized as follows: Form 15CA Remittance is chargeable to tax under IT Act. Remittance is not chargeable to tax under IT Act Remittance upto INR 5 Lakhs in a FY Remittance exceeds INR 5 Lakhs in a FY Remittance made by an Individual and is covered in Schedule III of FEMA Current Account Transactions Specific nature of transactions specified under Rule 37BB Other Cases Form 15CA-Fill Part A Certification obtained from Assessing Officer Other cases Not required to file Form 15CA-Fill Part D Form 15CA-Fill Part B Form 15CA- Fill Part C + Obtain certificate from CA in Form 15CB (1) Rule 37BB Specific nature of transactions where no information is required to be furnished are as follows: Sl. No. Purpose code as per RBI Nature of payment (1) (2) (3) 1 S0001 Indian investment abroad - in equity capital (shares) 2 S0002 Indian investment abroad - in debt securities 3 S0003 Indian investment abroad - in branches and wholly owned subsidiaries 4 S0004 Indian investment abroad - in subsidiaries and associates 5 S0005 Indian investment abroad - in real estate 6 S0011 Loans extended to Non-Residents 7 S0101 Advance payment against imports
Form 15CA/15CB 5.99 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. Purpose code as per RBI Nature of payment (1) (2) (3) 8 S0102 Payment towards imports - settlement of invoice 9 S0103 Imports by diplomatic missions 10 S0104 Intermediary trade 11 S0190 Imports below Rs.5,00,000 - (For use by ECD offices) 12 SO202 Payment for operating expenses of Indian shipping companies operating abroad 13 SO208 Operating expenses of Indian Airlines companies operating abroad 14 S0212 Booking of passages abroad - Airlines companies 15 S0301 Remittance towards business travel 16 S0302 Travel under basic travel quota (BTQ) 17 S0303 Travel for pilgrimage 18 S0304 Travel for medical treatment 19 S0305 Travel for education (including fees, hostel expenses etc.) 20 S0401 Postal services 21 S0501 Construction of projects abroad by Indian companies including import of goods at project site 22 S0602 Freight insurance - relating to import and export of goods 23 S1011 Payments for maintenance of offices abroad 24 S1201 Maintenance of Indian embassies abroad 25 S1202 Remittances by foreign embassies in India 26 S1301 Remittance by non-residents towards family maintenance and savings 27 S1302 Remittance towards personal gifts and donations 28 S1303 Remittance towards donations to religious and charitable institutions abroad 29 S1304 Remittance towards grants and donations to other Governments and charitable institutions established by the Governments 30 S1305 Contributions or donations by the Government to international institutions 31 S1306 Remittance towards payment or refund of taxes 32 S1501 Refunds or rebates or reduction in invoice value on account of exports 33 S1503 Payments by residents for international bidding. (2) Suggestive Check-list for issuing Form 15CB • Ascertain the nature of income and its characterisation from full facts of the transaction and obtain all documents for the transaction including accounting entries. • Conduct due diligence on genuineness of transaction as far as possible through invoices, contracts, etc. Obtain KYC – incorporation documents / passport copy, etc., where full details are not available in documentation provided. • Check Residential status of the non-resident – Obtain Tax Residency Certificate (TRC) if treaty benefit is availed along with Form 10F for incomplete particulars. Form 10F cannot replace TRC.
FEMA and International Taxation 5.100 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Now, it is mandatory to furnish Form 10F electronically. However, for certain category of Non-resident Taxpayers who are not having PAN and not required to have PAN as per relevant provisions of Income-tax Act,1961 read with Income tax Rules, 1962 are exempted from mandatory electronic filing of Form 10F till 30th September 2023. However, such taxpayers need to file Form 10F manually till 30th September 2023. Even if no treaty benefit is availed, obtain TIN of residence country and declaration that person is non-resident of India. • Identify the legal status of the tax payer – firm, company, etc., for determining correct rate of tax. • Obtain a declaration of facts from the recipient: – whether transaction is done in or outside India. – whether there is an office in India. – whether there is a Permanent Establishment or Business Connection in India. – whether the receiver is the beneficial owner or not, if applicable. • Keep a copy of all relevant documents for record purposes, especially where payments are made to tax friendly jurisdictions or where lower rate is applied than the Act. • For Tax treaty applicability: – Determine the Country of Residence of tax payer (CoR) and Country of Source of income (CoS) – Applicability of treaty vis-à-vis Residential status – Before determining treaty rate check DTAA Chart in BCAS Referencer along with: – Relevant portion of DTAA (as amended by MLI), Technical Explanation (US), Protocols and Memorandum of Understandings, MFN clause, LOB clause, etc. – Check for changes in DTAAs (CTAs) due to MLI from 1st April 2020. • Reference can be made to: – OECD and UN Model Convention Commentary, MLI Compendium by BCAS, commentaries by learned authors. • Cross-check applicability of Equalisation Levy. Form 15CA & Form 15CB to be signed using digital signature and submitted online electronically. • UDIN has to be generated for Form 15CB compliance. • Above check-list is only suggestive and not exhaustive. CA must check position under law and take full care before issuing CA Certificate. (3) Consequences for non filing of Form 15CA / 15CB If an assessee who is required to file Form 15CA / 15CB fails to furnish the same before making remittance to a non-resident, then he shall be liable to penalty provisions under section 271-I of the Income Tax Act, 1961. Such penal provision shall be attracted even if the person furnished inaccurate information. The amount of penalty which the AO may ask the assessee to pay for non-compliance is INR 1 lakh. Further, where CA furnishes incorrect information in Form 15CB, the CA may face penalty of Rs. 10,000 for each such certificate under section 271-J. (4) Revise or Cancel Form 15CA and Form 15CB Forms can be withdrawn within 7 days from the date of submission. The link to withdraw the submitted form will be available in the login of the assessee concerned on the income tax website.
Form 15CA/15CB 5.101 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication (5) Applicability of Section 206AA Section 206AA prescribes a withholding rate which is higher of 20% or the applicable rate in cases where PAN of the deductee is not available. However, the rigours of Section 206AA have been reduced in respect of payments in the nature of interest, royalty, fees for technical services, dividend and payments on transfer of any capital asset to a non-resident or foreign company. Rule 37BC has provided relaxation from deduction of TDS at higher rate in such cases if the non-resident furnishes the following details and documents: i. name, e-mail id, contact number; ii. address in the country or specified territory outside India of which the deductee is a resident; iii. TRC issued by country or specified territory of residence outside India from the Government of that country or specified territory if the law of that country or specified territory provides for issuance of such certificate; iv. Tax Identification Number of the deductee in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the deductee is identified by the Government of that country or the specified territory of which he claims to be a resident. 2
FEMA and International Taxation 5.102 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication India along with other nations has entered into the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). This brought to a culmination the various BEPS Action Plans agreed upon under the aegis of G20/ OECD. The MLI so far covers 100 jurisdictions and has been ratified by 80 jurisdictions. The purpose of MLI is to provide a more transparent tax environment and to tackle the Base Erosion and Profit Shifting (BEPS) tax planning strategies, wherein profits are shifted to jurisdictions having low tax or no tax, usually known as tax havens. The MLI will serve to achieve BEPS outcomes across the network of existing tax treaty agreements without the need of bilaterally renegotiating the tax treaty entered into by each of the countries signatory to the MLI. The extent to which the purpose mentioned above will be achieved is dependent on the instrument of ratification and list of reservations and notifications deposited by each of the signatories with respect to its notified covered tax agreement. India, on 25 June 2019, deposited its instrument of ratification for MLI, along with the list of reservations and notifications. (1) Covered Tax Agreement Each country (i.e. signatory) will have to specify the existing list of tax treaties to which MLI provision would apply. The tax treaty of these countries is required to be read along with the ratified MLI. The list of tax treaties specified by signatories to MLI is known as Covered Tax Agreement (CTA). MLI provision will be applicable only when both parties have notified each other in the list of their CTAs. For example, India has notified tax treaties with Germany and Mauritius as CTA. However, Germany & Mauritius have not notified tax treaty with India as CTA. In such a scenario, the MLI provisions will not be effective between India and Germany and between India and Mauritius. The existing tax treaty between India and Germany; and that between India and VII. Multilateral Instrument – An Introduction Mauritius would prevail. It should be noted that USA has not become a signatory to the MLI and hence the question of India-USA treaty being a CTA does not arise at all. (2) Ratification of MLI Ratification of an instrument helps each country to specify its definite position on each of the Articles of MLI. India is the 28th country to have deposited its instrument of ratification with the OECD. This will modify India’s tax treaties with countries which have included India in their list of CTAs. As on 21st February 2023, status of the Indian Treaties which have been updated by effect of MLI are as follows: Sr No. Countries For Withholding Tax For Other Tax 1 Albania 1-Apr-2021 1-Apr-2022 2 Australia 1-Apr-2020 1-Apr-2020 3 Austria 1-Apr-2020 1-Apr-2020 4 Belgium 1-Apr-2020 1-Apr-2020 5 Bulgaria 1-Apr-2023 1-Apr-2024 6 Canada 1-Apr-2020 1-Apr-2021 7 Croatia 1-Apr-2022 1-Apr-2022 8 Cyprus 1-Apr-2021 1-Apr-2021 9 Czech Republic 1-Apr-2021 1-Apr-2021 10 Denmark 1-Apr-2020 1-Apr-2021 11 Egypt 1-Apr-2021 1-Apr-2022 12 Estonia 1-Apr-2023 1-Apr-2023 13 Finland 1-Apr-2020 1-Apr-2020 14 France 1-Apr-2020 1-Apr-2020 15 Georgia 1-Apr-2020 1-Apr-2020 16 Greece 1-Apr-2022 1-Apr-2022 17 Hong Kong 1-Apr-2023 1-Apr-2024 18 Hungary 1-Apr-2022 1-Apr-2022 19 Iceland 1-Apr-2020 1-Apr-2021 20 Indonesia 1-Apr-2021 1-Apr-2022
Multilateral Instrument – An Introduction 5.103 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sr No. Countries For Withholding Tax For Other Tax 21 Ireland 1-Apr-2020 1-Apr-2020 22 Israel 1-Apr-2020 1-Apr-2020 23 Japan 1-Apr-2020 1-Apr-2020 24 Jordan 1-Apr-2021 1-Apr-2022 25 Kazakhstan 1-Apr-2021 1-Apr-2021 26 Korea 1-Apr-2021 1-Apr-2021 27 Latvia 1-Apr-2020 1-Apr-2021 28 Lithuania 1-Apr-2020 1-Apr-2020 29 Luxembourg 1-Apr-2020 1-Apr-2020 30 Malaysia 1-Apr-2022 1-Apr-2022 31 Malta 1-Apr-2020 1-Apr-2020 32 Netherlands 1-Apr-2020 1-Apr-2020 33 New Zealand 1-Apr-2020 1-Apr-2020 34 Norway 1-Apr-2020 1-Apr-2021 35 Poland 1-Apr-2020 1-Apr-2020 36 Portugal 1-Apr-2021 1-Apr-2021 37 Qatar 1-Apr-2020 1-Apr-2021 38 Republic of Serbia 1-Apr-2020 1-Apr-2020 39 Russia 1-Apr-2021 1-Apr-2021 40 Saudi Arabia 1-Apr-2021 1-Apr-2021 41 Singapore 1-Apr-2020 1-Apr-2020 42 Slovakia 1-Apr-2020 1-Apr-2020 43 Slovenia 1-Apr-2020 1-Apr-2020 44 South Africa 1-Apr-2023 1-Apr-2024 45 South Korea 1-Apr-2021 1-Apr-2021 46 Spain 1-Apr-2023 1-Apr-2023 47 Thailand 1-Apr-2023 1-Apr-2023 48 Ukraine 1-Apr-2020 1-Apr-2021 49 United Arab Emirates 1-Apr-2020 1-Apr-2020 50 United Kingdom 1-Apr-2020 1-Apr-2020 51 Uruguay 1-Apr-2021 1-Apr-2021 * Romania, Sweden have ratified but their notification of completion of internal procedures have not been submitted with the depository. Indian tax department has put up Synthesised Text for its treaties with 31 countries as of February 2023. These texts provide a consolidated reading of the treaty provisions with that of the MLI. (3) Impact of MLI Analysis on treaty implications with respect to transactions involving the above listed countries will now have to factor in MLI provisions as well. MLI provisions have to be applied alongside the treaty provisions. MLI contains 38 Articles, which can be classified into different buckets: • Articles 1 and 2 dealing with the Scope and Interpretation of Terms used in the MLI • Articles 3 to 17 contain substantive provision which deals and addresses specific BEPS concern over following parts: o Part II dealing with Hybrid Mismatches; o Part III dealing with Treaty Abuse and mandatory standards in that regard; o Part IV dealing with Avoidance of Permanent Establishment Status; and o Part V for Improving Dispute Resolution. • Articles 18 to 26 contain provision related to mandatory arbitration, and • Articles 27 to 39 contain final procedural provisions. The changes, in brief, are: (4) Mandatory Minimum Standard Parties to MLI are required to meet certain prescribed minimum standards in their tax treaties. The following are minimum standards of MLI: • Article 6 - Purpose of CTA Article 6 seeks to insert a statement in the preamble of the tax treaties to the effect that the purpose of the treaty is not to create
FEMA and International Taxation 5.104 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication opportunities for double non-taxation or reduced taxation through tax avoidance or evasion including treaty shopping. The countries may also make reference to the intention of developing economic relationship and enhancement of cooperation in tax matters. • Article 7 - Prevention of treaty abuse BEPS Action Plan 6 states that countries, at a minimum, should implement one of the following three treaty abuse provisions: – Principal Purpose Test (PPT); – PPT plus either simplified or detailed Limitation of Benefit (LOB); – Detailed LOB supplemented by a mechanism that would deal with conduit arrangement. PPT is considered as default option under MLI. Parties to MLI are permitted to supplement the PPT by choosing to apply a simplified LOB provision. MLI does not include detailed LOB provision. India has notified application of PPT as an interim measure. India has further stated that simplified LOB provision will be adopted through bilateral negotiation where possible, as replacement or in addition to PPT. • Article 16 - Mutual Agreement Procedure This article provides for mandatory inclusion of Mutual Agreement Procedure in CTAs. Parties to MLI can opt out of minimum standard in limited situations such as where the CTA already meets the minimum standards, if parties decide to reach a mutually satisfactory solution, etc. Apart from the above Minimum Standards, the MLI has brought in several anti-tax avoidance rules through its following Articles: 1. Article 3: Concerning Hybrid Mismatches due to transparent entities. India has not opted for this Article. 2. Article 4: Determination of residence of dual resident entities by the Mutual Agreement Procedure. 3. Article 5: Dealing with elimination of double taxation so as to counter the problems created by exemption method in certain treaties. 4. Article 8: Countering dividend stripping transactions whereby a higher threshold requirement has been brought in. 5. Article 9: Bringing in an enhanced threshold for taxing capital gains in the country where immovable property is transferred through shares or interests of entities which derive their value from such property. 6. Article 10: Creating an Anti-abuse rule for Permanent Establishments situated in third country. 7. Article 12: Expansion of the Agency PE concept to include Commissionaire Arrangements which are not prevalent in India. 8. Article 13: Restricting the specific activity exemptions only to situations where the activities are preparatory or auxiliary in character. 9. Article 14: Anti-avoidance rules to block avoidance of a PE status through splitting up of contracts. Through the MLI it is also sought that countries have an improved dispute resolution mechanism which has been bought in through: 1. Article 16: Enhanced access to Mutual Agreement Procedure available in the tax treaty. 2. Article 17: Providing for Corresponding Adjustments 3. Article 19: Mandatory Binding Arbitration as a tool to resolve disputes. However, India has not opted for this Article and hence there will not be a Mandatory Binding Arbitration as far as India is concerned.
Multilateral Instrument – An Introduction 5.105 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication How each of the above Article applies to India depends on what reservations and options India has given or selected and whether they match with those given or selected by the other country. (5) Reservation For anything that is not a BEPS minimum standard, the MLI provides flexibility to opt out of provision entirely or, in some cases, partly through reservations. The reservations apply symmetrically i.e. if a party uses reservation to opt out of a provision, then that provision will not apply between the reserving party and all other parties to the CTA under the MLI. Party to MLI may reserve the right for provisions of the MLI not to apply to a subset of CTAs. (6) Optional Provision MLI provides flexibility with respect to application of optional and alternative provisions to address the same issue. Each signatory to MLI is required to notify the option it would like to choose. For an example, Article 13 – “Artificial avoidance of permanent establishment status through the specific activity exemptions” provides two options under Article 13(1), which are as under: – Option A under Article 13(2) - provides exemption if activity carried on is preparatory and auxiliary in nature. – Option B under Article 13(3) - provides automatic exemption to each and every activity covered under Article 5(4) of the Covered tax Agreement and the same is not subject to preparatory and auxiliary condition. Parties to MLI are required to choose one of the options and notify the depositary of their choice. It may be noted that in case the position taken by one country on certain Articles of MLI Convention do not match with position taken by another country on the same Article, then the existing tax treaty between the countries would prevail over MLI. Thus, it is important to have matching concept on position taken by each of the signatories with respect to each other, for effective application of MLI. Therefore, careful consideration of the above factors needs to be made before one can conclusively apply the MLI to a CTA. At the same time, it should be noted that the MLI does not cover all aspects of a treaty. For example, the rates as prescribed in a treaty are not impacted by the MLI and will continue as before. Following documents can help in further study of the MLI and its impact: From the OECD website – http://www.oecd.org/ tax/treaties/multilateral-convention-to-implementtax-treaty-related-measures-to-prevent-beps.htm 1. Multi-Lateral Instrument 2. Explanatory Statement to MLI; and 3. MLI Positions adopted and deposited by various MLI Signatories with OECD 4. MLI Application Toolkit and database to match positions for treaties vis-à-vis India 5. BEPS Action Plan 15 From the Indian income-tax department website: https://www.incometaxindia.gov.in/Pages/ international-taxation/dtaa.aspx 1. The Synthesized text of treaties read with MLI From the BCAS website: https://www.bcasonline. org/Files/ContentType/attachedfiles/index.html MLI Decoded - A referencer to the various observations and notifications given by the Contracting Jurisdictions with respect to the tax treaties which India has signed. It also illustrates how these reservations and notifications of the two contracting countries interact with each other. 2
FEMA and International Taxation 5.106 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication VIII. Double Taxation Avoidance Agreements Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 1. Albania 355 ITR 80 1.4.2014 A. Y. 2015-16 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2021. Please see note 1 for MLI impact. 2. Armenia 271 ITR 72 1.4.2005 A. Y. 2006-07 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For Limitation Of Benefits (‘LOB’) Clause – Refer Note 7. 3. Australia 194 ITR 241 Modified via Protocol 358 ITR 15 01.04.1992 A.Y. 1993-94 15 @ 15 @ [See Note 3] [See Note 3] Refer Note 9 for transactions between special relationship holders. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 4. Austria 251 ITR 97 01.04.2002 A.Y. 2003-04 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 5. Bangladesh 198 ITR 99 Modified via Protocol 355 ITR 97 01.04.1992 A.Y. 1993-94 10 @ 15 @ *10 @ 10 @ No separate provision 10% tax on dividends if at least 10% of the capital is owned by Company; in other cases 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 6. Belarus 233 ITR 4 Modified via Protocol Notification No. 2/2016/F.No. 501/07/1999-FTD-I 01.04.1999 A.Y. 2000-01 10 @ 15 @ *10 @ 15 @ 15 @ 10% tax on dividends if at least 25% of the capital is directly and beneficially owned by a company; in other cases 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 7. Belgium 228 ITR 79 247 ITR 39 01.04.1998 A.Y. 1999-2000 15 @ 15 @ 10 @ 10 @ 20 @ 10% tax on interest if loan granted by bank, other cases 15%. 10% tax on royalties and technical services fees w.e.f. 1.4.1998. Modification also restricts scope of royalties. Refer Note 9 for transactions between special relationship holders. MFN clause available. Please refer Note 11. MLI effective from 1/4/2020. Please see note 1 for MLI impact.
Double Taxation Avoidance Agreements 5.107 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 8. Bhutan Notification No.42/2014 [F.NO.503/4/2004- FTD-II] 01.04.2015 A.Y. 2016-17 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For Limitation of Benefits (‘LOB’) Clause – Refer Note 6. 9. Botswana 302 ITR 277 01.04.2009 A.Y. 2010-11 7.5 @ 10 @ *10 @ 10 @ 10 @ 7.5% tax on dividends if at least 25% of the capital is owned by Company; in other cases 10%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 10. Brazil 195 ITR 73 01.04.1993 A.Y. 1994-95 15 @ *15 @ 25 @ 15 @ 25 @ 15 @ Fees for Technical Services are covered under Royalty article as per protocol Royalties arising from use or right to use trademarks taxable at 25%, in other cases tax rate is 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 11. Bulgaria 220 ITR 30 01.04.1996 A.Y. 1997-98 15 @ *15 @ 15 @ 20 @ 20 @ Royalties relating to Copyrights, etc. taxable at 15%, in all other cases 20%@ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 12. Canada 229 ITR 44 01.04.1998 A.Y. 1999-2000 *15 @ 25 @ 15 @ [See Note 3] [See Note 3] 15% tax on dividends if at least 10% of capital is owned by a Co., in other cases 25%. Refer Note 9 for transactions between special relationship holders. MLI effective from 1/4/2020. Please see note 1 for MLI impact. *Both countries have matching MLI provisions and hence the test of 365 days of holding period for lower rate of tax of 15% must be met. Other conditions are specified in the treaty. 13. China 214 ITR 160 01.04.1995 A.Y. 1996-97 10 @ 10 @ 10 @ 10 @ For Interest, benefit of exemption given to the financial institution owned by resident of a Contracting State for interest earned in respect of debt claims indirectly financed by the Government now withdrawn – By virtue of Paragraph 3 substituted by Protocol to the treaty. Refer Note 9 for transactions between special relationship holders. The provisions of the protocol will apply in India from 1 April, 2020.
FEMA and International Taxation 5.108 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 14. Colombia Notification No. 44/2014/F.No. 501/3/99-FTD-II 01.04.2015 A.Y. 2016-17 5 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For Limitation Of Benefits (‘LOB’) Clause – Refer Note 6. 15. Croatia 1.4.2016 A.Y. 2017-18 5 @ 15 @ *10 @ 10 @ 10 @ 5% tax on dividends if at least 10% of the capital is directly owned by the Company, in other cases 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2022. Please see note 1 for MLI impact. 16. Cyprus 218 ITR 70 Notification No. 3/2017/F. No. 504/05/2003-FTD-I 1.4.1993 A.Y. 1994-95 1.4.2017 AY 2018-19 *10 @ **10 @ 10 @ 10 @ *10% if the beneficial owner of the dividend is a resident of other contracting state ** Refer Note 10 for exempted entities. Refer Note 9 for transactions between special relationship holders. Article 26 – Exchange Of Information made more comprehensive MLI effective from 1/4/2021. Please see note 1 for MLI impact. 17. Czech Republic 241 ITR 90 1.4.2000 A.Y. 2001-02 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 18. Denmark 180 ITR 1 Modified via Protocol Notification No. 45/2015/F.No. 503/02/1998-FTD-I 1.4.1990 A.Y. 1991-92 15 @* 25 @ **10 + 15 + 20 @ 20 @ 15% tax on dividends if at least 25% of the capital is owned by Company; in other cases 25%. Interest is taxable at 10% on loan from bank; in other cases it is taxable at 15%. Refer Note 9 for transactions between special relationship holders. ** Refer Note 10 for exempted entities. Protocol replaces Article 26 - Exchange of Information to make it more comprehensive. MLI effective from 1/4/2020. Please see note 1 for MLI impact. *Both countries have matching MLI provisions and hence the test of 365 days of holding period for lower rate of tax of 15% must be met. Other conditions are specified in the treaty. 19. Estonia 346 ITR 143 1.4.2013 A.Y 2014-15 10 @ *10 @ 10 @ 10@ Refer Note 9 for transactions between special relationship holders. * Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6.
Double Taxation Avoidance Agreements 5.109 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 20. Ethiopia 353 ITR 78 1.4.2013 A.Y. 2014-15 7.5 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6 21. Fiji Notification No.35/2014 [F.No.503/11/2005-FTDII/SO 2049E 1.4.2015 A.Y. 2016-17 5 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6 22. Finland 324 ITR 1 1.4.2011 A.Y. 2012-13 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11. For LOB Clause – Refer Note 7. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 23. France 209 ITR 130 244 ITR 134 1.4.1995 A.Y. 1996-97 10 @ *10 @ 10 @ 10 @ 10% tax on dividend, interest, royalties and technical services fees w.e.f. 1-4-1997. Modification reflects the position in Protocol. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 24. Georgia 341 ITR 1 1.4.2012 A.Y 2013-14 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6 MLI effective from 1/4/2020. Please see note 1 for MLI impact. 25. Germany (Federal Republic of Germany) 223 ITR 130 1.4.1997 A.Y. 1998-99 10 @ *10 @ 10 @ 10 @ Treaty has some of the lowest withholding rates. It also effectively lowers from 29.10.1996, withholding rates of India’s Treaties with other OECD countries such as France, Netherlands, Norway, Spain, etc. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 26. Greece 64 ITR 86 1.4.1963 A.Y. 1964-65 * * * No separate provision * Dividend, interest and royalty income is chargeable as per domestic law in source country only. 27. Hongkong Special Administrative Region ofthe People’s Republic of China 1.4.2020 A.Y. 2021-22 5@ *10@ 10@ 10@ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities.
FEMA and International Taxation 5.110 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 28. Hungary 274 ITR 74 1.4.2006 A.Y. 2007-08 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11. 29. Iceland 298 ITR 2 1.4.2008 A.Y 2009-10 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 30. Indonesia Notification No. 17/2016/ F. No. 503/4/2005 – FTD-II 1.4.2017 A.Y. 2018-19 Old Treaty 171 ITR 27 effective until AY 2017-18 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Article 27 - Exchange of Information made more comprehensive. For LOB Clause - Refer Note 6 MLI effective from 1/4/2021. Please see note 1 for MLI impact. 31. Iran (Islamic Republic of Iran) Notification S.O. No. 1442(E) [No.29/2021/F. NO.501/03/92-FTD-II] 01.04.2021 AY 2022-23 10@ 10@ 10@ 10@ Interest will be exempt if paid to and beneficially owned by Government or government controlled institution. Refer Note 9 for transactions between special relationship holders 32. Ireland 254 ITR 245 255 ITR 95 1.4.2002 A.Y. 2003-04 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 33. Israel 222 ITR 10 [Notification No.10/2017 F. No. 500/14/2004-FTD-II dated 14 February 2017 1.6.96/1.4.94 1.4.2017 AY 2018-19 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. LOB Clause amended – Refer Note 6 Article 27 - Exchange of Information made more comprehensive. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 34. Italy 220 ITR 3 1.4.1996 A.Y. 1997-98 15 @ 25 @ *15 + 20 @ 20 @ 15% tax on dividends if at least 10% of the capital is owned by Company; in other cases 25%. Protocol amending the DTAA with Italy has been signed on 13th December, 2005 and awaiting notification, pursuant to which the tax rates would change to 10% for Dividends, Interest, Royalties and Fees for Technical Services. Concepts of Service PE and Conditions to treat Insurance PEs to be introduced. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities.
Double Taxation Avoidance Agreements 5.111 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 35. Japan 182 ITR 380 245 ITR 15 284 ITR 64 345 ITR 91 Notification No.102/2016 /F. No. 506/69/81-FTD-I] dated 28 October 2016 1.4.1990 A.Y. 1991-92 1.4.2017 AY 2018-19 10 @ *10 @ 10 @ 10 @ 10% rate is applicable with effect from 1st April2007 vide Notification No. 186/2006 dated 19th July 2006. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Article 26 – Exchange Of Information clause made more comprehensive MLI effective from 1/4/2020. Please see note 1 for MLI impact. 36. Jordan 241 ITR 69 1.4.2000 A.Y. 2001-02 10 @ *10 @ 20 @ 20 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2021. Please see note 1 for MLI impact. 37. Kazakhstan 228 ITR 162 1.4.1998 A.Y. 1999-2000 10 @ 10 @ 10 @ 10 @ Deeming provision for arising of interest. Royalty and fees for technical services with respect to payer being that State itself, a political subdivision, a local authority removed vide protocol. Refer Note 9 for transactions between special relationship holders. MFN clause available. Please refer Note 11. For LOB Clause - Refer Note 6 MLI effective from 1/4/2021. Please see note 1 for MLI impact. 38. Kenya 157 ITR 8 1.4.1984 A.Y. 1985-86 further modified on 22-02-2018 10 @ *10 @ 10 @ No separate provision There is a specific clause for management and professional fees which is taxable income @ 10%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Article of Limitation of Benefit and collection of taxes introduced. For LOB Clause - Refer Note 6 39. Korea (South) 165 ITR 191 [Notification No. 96/2016/F. No. 500/121/1996-FTD-II dated 24 October 2016 1.4.1986 A.Y. 1987-88 1.4.2017 AY 2018-19 15 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Article 26 amended – Exchange Of Information made more comprehensive. LOB clause introduced – Refer Note 6. MLI effective from 1/4/2021. Please see note 1 for MLI impact.
FEMA and International Taxation 5.112 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 40. Kuwait 295 ITR 44 1.4.2008 A.Y. 2009-10 *10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7. 41. Kyrgyz Republic 248 ITR 218 1.4.2002 A.Y. 2003-04 10 @ *10 @ 15 @ 15 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. See protocol for other articles. 42. Latvia 363 ITR 177 1.4.2014 A.Y. 2015-16 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 43. Libya 137 ITR 27 1.4.1983 A.Y. 1984-85 * * * No separate provision *Dividend, interest, royalty will be taxable as per domestic law of source country. 44. Lithuania 346 ITR 116 1.4.2013 A.Y 2014-15 *5 @ 15 @ **10 @ 10 @ 10 @ *5% tax on dividends if at least 10% of the capital is owned by Company; in other cases 15%. Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7 MLI effective from 1/4/2020. Please see note 1 for MLI impact. 45. Luxembourg 318 ITR 9 1.4.2010 A.Y. 2011-12 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 46. Macedonia Notification No. 94/2015/F.No. 503/08/2004-FTD-I 1.4.2015 A.Y. 2015-16 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6 47. Malaysia 353 ITR 53 1.4.2013 A.Y. 2014-15 5 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6 MLI effective from 1/4/2022. Please see note 1 for MLI impact.
Double Taxation Avoidance Agreements 5.113 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 48. Malta Notification No. 34/2014/ F.No. 504/06/2003-FTD-I 1.4.2015 A.Y 2016-17 10 @* **10 @ 10 @ 10 @ *As per para 1 of the protocol, under the full imputation system adopted by Malta, there is no withholding tax on dividends in addition to the tax chargeable in respect of the profits or income of the company out of which the dividends are paid. Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. For Limitation Of Benefits (‘LOB’) Clause – Refer Note 6. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 49. Mauritius 146 ITR 214 243 ITR 25 [Notification No. 68/2016/F. No. 500/3/2012-FTD-II dated 10 August 2016 1.4.1982 A.Y. 1983-84 1.4.2017 AY 2018-19 5 @ 15 @ *7.5 @ 15 + **10 @ 5% tax on dividends if at least 10% of the capital is owned by Company, in other cases 15%. *Interest exempt if beneficially owned by Bank resident of other Contracting State carrying on bonafide banking business. This exemption shall apply only if such interest arises from debtclaims existing on or before 31 March 2017 ** Fees for Technical services clause has been introduced. Refer Note 9 for transactions between special relationship holders. Refer Note 10 for exempted entities. Capital Gains Clause amended vide protocol - No Capital Gains tax if the alienated Shares are acquired on or before 31 March 2017 Taxable in India, if the alienated Shares are acquired on or after 1 April 2017. Taxable in India if shares are acquired and alienated during the period 1 April 2017 to 31 March 2019. However, tax rate will be limited to 50 per cent of the domestic tax rate in India, subject to the fulfilment of the conditions in the Limitation Of Benefits (LOB) Article. Article 26 - Exchange of Information made more comprehensive. LOB clause introduced – Refer Note 7
FEMA and International Taxation 5.114 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 50. Mexico 329 ITR 7 1.4.2011 A.Y. 2012-13 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7 51. Mongolia 222 ITR 44 1.4.1994 A.Y. 1995-96 15 @ *15 @ 15 @ 15 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 52 Montenegro 308 ITR 42 1.4.2009 A.Y. 2010-11 5 @ 15 @ *10 @ 10 @ 10 @ 5% tax on dividends if at least 25% of the capital is owned by Company; in other cases 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 53. Morocco 243 ITR 26 1.4.2001 A.Y. 2002-03 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Protocol signed introducing Art. 26 dealing with Exchange of Information. 54. Mozambique 335 ITR 65 1.4.2012 A.Y 2013-14 7.5 @ **10 @ 10 @ No separate provision * *Any remuneration for technical assistance relating to the use of or the right to use the right or property referred to in the definition of property is included in the term royalty. Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7 55. Myanmar 314 ITR 6 1.4.2010 A.Y. 2011-12 5 @ *10 @ 10 @ No separate provision Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7 56. Namibia 236 ITR 230 1.4.2000 A.Y. 2001-02 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. –Unique LOB clause - Each country gets right to tax income exempted from tax in other country 57. Nepal 345 ITR 128 1.4.2013 A.Y 2014-15 *5 @ 10 @ **10 @ ***15 @ No separate provision *5% tax on dividends if at least 10% of the capital is owned by Company; in other cases 10%. Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. ***MFN Clause available. Where Nepal, by entering into a treaty with a third state, limits its taxation of royalties to a rate lower or a scope more restricted than as per this agreement, then same rate or scope will also apply to this treaty. For LOB Clause – Refer Note 7
Double Taxation Avoidance Agreements 5.115 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 58. Netherlands 177 ITR 72 239 ITR 56 350 ITR 39 1.4.1997 [01.04.87 for Air transport] A.Y. 1998-99 10 @ *10 @ 10 @ 10 @ Reduced rates for dividend and interest from 1.4.1997. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11 Protocol replaces Article 26 - Exchange of Information to make it more comprehensive. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 59. New Zealand 166 ITR 90 225 ITR 15 242 ITR 147 1.4.1987 A.Y. 1988-89 15 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Protocol restricting treaty benefits to Indian or New Zealand residents. Reduced rates come into force from 1.4.2000 and apply to A.Y. 2001-02. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 60. Norway 345 ITR 157 1.4.2012 A.Y 2013-14 10 @ *10 @ 10 @ 10 @ For LOB Clause – Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11 Refer Note 7. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 61. Oman (Sultanate of) 228 ITR 21 1.4.1998 A.Y. 1999-00 10 @ 12.5 @ *10 @ 15 @ 15 @ 10% tax on dividends if beneficial owner is company owning at least 10% of capital in payer company. 12.5% in all other cases. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 62. Philippines 219 ITR 60 1.4.1995 A.Y. 1996-97 15 @ 20 @ *10 @ 15 @ 15 @ No separate provision 15% tax on dividends if at least 10% of the capital is owned by Company; in other cases 20%. Interest at 10% in hands of financial institutions, Insurance Company and also on public issues of bond, debentures, etc., and at 15% in all other cases. 15% tax on Royalties if it is payable in pursuance of any collaboration agreement approved by the Government of India. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11.
FEMA and International Taxation 5.116 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 63. Poland 182 ITR 147 1.4.1990 A.Y. 1991-92 1.4.2015 A.Y 2016-17 10 @ *10 @ 15 @ 15 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB clause – Refer Note 6. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 64. Portuguese Republic (Portugal) 244 ITR 57 1.4.2001 A.Y. 2002-03 10 @ 15 @ *10 @ 10 @ 10 @ 10% tax on dividend if at least 25% of the capital is owned by a Company for an uninterrupted period of 2 years prior to payment of the dividend, otherwise 15% limitation of tax on interest to be settled under MAP by competent Authorities. See protocol to the Treaty for details on other Articles. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2021. Please see note 1 for MLI impact. 65. Qatar 242 ITR 165 1.4.2001 A.Y. 2002-03 5 @ 10 @ *10 @ 10 @ 10 @ 5% tax on dividend if beneficial owner is company owning, at least 10% of capital in payer company. 10% in all other cases. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 66. Romania Notification No 13/2014 F.No.501/10/1995-FTD-I 1.4.14 A.Y 2015-16 10 @ *10 @ 10 @ 10@ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7 67. Russian Federation 233 ITR 90 1.4.99 A.Y. 2000-01 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2021. Please see note 1 for MLI impact. 68. Saudi Arabia 286 ITR 87 1.4.2007 AY 2008-09 5 @ *10 @ 10 @ No Separate provision Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. ”Resident” includes (in case of Saudi Arabia), an Indian national who is present in Saudi Arabia for a period of at least 183 days in a fiscal year. “Zakat” is treated as a tax on income. DTA to be reviewed after 5 years for inclusion of FTS clause. MLI effective from 1/4/2021. Please see note 1 for MLI impact.
Double Taxation Avoidance Agreements 5.117 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 69. Serbia 308 ITR 18 1.4.2009 A.Y. 2010-11 *5 @ 15 @ **10 @ 10 @ 10 @ 5% tax on dividends if at least 25% of the capital is owned by Company; in other cases 15%. MLI effective from 1/4/2020. Please see note 1 for MLI impact. Both countries have matching MLI provisions and hence the test of 365 days of holding period for lower rate of tax of 5% must be met. Other conditions are specified in the treaty. Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. 70. Singapore 209 ITR 1 Modified via Protocol signed pursuant to CECA 276 ITR 142 Further Modified via Protocol 337 ITR 93 Notification No. 96/2016/F. No. 500/121/1996-FTD-II dated 23 March 2017 1.4.1994 A.Y. 1995-96 1.4.2017 AY 2018-19 10 @ 15 @ 10 @ 15 @ 10 @ 10 @ 10% tax on dividend if at least 25% of the capital is owned by co. In other cases 15%. Interest at 10% if recipient is bank, insurance co. or similar financial institution. In other cases 15%. Refer Note 9 for transactions between special relationship holders. Second Protocol dated 1 September 2011 replaces Article 28- Exchange of Information to make it more comprehensive. Third protocol dated 27 February 2017 - Article on Capital Gains amended to be in line with Protocol of India – Mauritius Treaty as under: Taxable in India, if the alienated Shares are acquired on or after 1 April 2017 Taxable in India if shares are acquired and alienated during the period 1 April 2017 to 31 March 2019. However, tax rate will be limited to 50 per cent of the domestic tax rate in India, subject to the fulfilment of the conditions in the Limitation Of Benefits (LOB) Article Article 26 - Exchange Of Information made more comprehensive. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 71. Slovak Republic 1.4.2000 A.Y. 2001-02 15@ 25@ 15@ 30@ 30@ Both countries have matching MLI provisions and hence for lower rate of tax on dividend @ 15%, the test of 365 days of holding period for at least 25% of share capital must be met. Other conditions are specified in the treaty. Refer Note 9 for transactions between special relationship holders. MLI effective from 1/4/2020. Please see note 1 for MLI impact.
FEMA and International Taxation 5.118 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 72. Slovenia 275 ITR 144 1.4.2006 A.Y. 2007-08 *5 @ 15 @ 10 @ 10 @ 10 @ 5% tax on dividend if beneficial owner is company owning at least 10% of capital in payer company, 15% in all other cases. MLI effective from 1/4/2020. Please see note 1 for MLI impact. Both countries have matching MLI provisions and hence the test of 365 days of holding period for lower rate of tax of 5% must be met. Other conditions are specified in the treaty. Refer Note 9 for transactions between special relationship holders. 73. South Africa 231 ITR 23 1.4.1998 A.Y. 1999-2000 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Protocol effective from 26 November 2014 replaces Article 28- Exchange of Information to make it more comprehensive. 74. Spain 214 ITR 197 1.4.1996 A.Y. 1997-98 15 @ *15 @ 10 @ 10 @ Royalty payment for use of or right to use equipment was taxable at 10%, in other cases taxable rate was 20%. However, Royalties and Fees for Technical Services taxable at 10% as per lower rate specified in IndoGerman DTAA w.e.f. 26-10-1996. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11. Protocol amending treaty introduced Exchange of Information, Assitance for collection of taxes and Limitation Of Benefits (‘LOB’). For LOB clause – Refer Note 7. 75. Sri Lanka 363 ITR 39 1.4.2014 A.Y. 2015-16 7.5 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11. Article 26 - Exchange of Information made more comprehensive. For LOB Clause – Refer Note 7. 76. Sudan 271 ITR 3 1.4.2005 A. Y. 2006-07 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 77. Sweden 229 ITR 11 1.4.1998 A.Y. 1999-2000 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MFN clause available. Please refer Note 11.
Double Taxation Avoidance Agreements 5.119 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 78. Swiss Confederation 214 ITR 223 248 ITR 209 Press Release dated 16 December 2016 1.4.1995 A.Y. 1996-97 10 @ 10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. MFN clause available. Please refer Note 11. Extensive Modifications to many articles including P.E. come into effect from 1.4.2001. Joint declaration for implementation of Automatic Exchange Of Information signed on 22 November 2016. The exchange of information has started from September 2019. 79. Syria 312 ITR 9 1.4.2009 A.Y. 2010-2011 5 @ 10 @ *10 @ 10 @ No separate provision 5% tax on dividend at least 10% of capital is held by company, 10% in all other cases Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7. 80. Tajikistan 315 ITR 1 Press Release dated 14 February 2016 1.4.2010 A.Y. 2011-12 5 @ 10 @ *10 @ 10 @ No separate provision Dividend is taxable at 5% where the beneficial owner is a company holding at least 25% of the share capital. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7. The Union Cabinet has provided approval to amend the India - Tajikistan Treaty. Notification is awaited. 81. Tanzania 343 ITR 5 1.4.2012 A.Y. 2013-14 *5 @ 10 @ **10 @ 10 @ No separate provision *5% tax on dividends if at least 25% of the capital is owned by Company; in other cases 10% Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. For LOB Clause – Refer Note 7. 82. Thailand Notification No. 88/2015/F No. 503/5/2005-FTD-II 1.4.2016 A.Y. 2017-18 Old Treaty 161 ITR 82 effective until AY 2015- 16 10 @ *10 @ 10 @ No separate provision Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Article 26 - Exchange of Information made more comprehensive. Protocol to Treaty covers collection of taxes, tax on disposal of profits, determination of profits attributable to a PE and Exchange of Information. For LOB Clause – Refer Note 6 83. Trinidad and Tobago 240 ITR 184 1.4.2000 A.Y. 2001-02 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities.
FEMA and International Taxation 5.120 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 84. Turkey 224 ITR 145 1.4.1994 (notified on 03.02.97) A.Y. 1995-96 15 @ *10 @ *15 @ 15 @ 15 @ Interest is taxable at 10% if recipient is a bank or a financial institution, in other cases 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 85. Turkmenistan 228 ITR 44 1.4.1998 A.Y. 1999-2000 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 86. Uganda 270 ITR 83 1.4.2005 A. Y. 2006-07 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 87. Ukraine 253 ITR 54 1.4.2002 A.Y. 2003-04 10 @ 15 @ *10 @ 10 @ 10 @ Dividend taxable @ 10% if at least 25% of the capital beneficially owned by a company, otherwise @ 15%. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 88. United Arab Emirates 205 ITR 49 Notification no. 282 dated 28.11.07 295 ITR 40 352 ITR 43 1.4.1994 A.Y. 1995-96 10 @ *5 @ 12.5 @ 10 @ No separate provision Tax on interest at 5% in cases of banks, etc. and at 12.5% in all other cases. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Protocol replaces Article 28- Exchange of Information to make it more comprehensive. For LOB Clause – Refer Note 7. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 89. United Arab Republic (Egypt) 74 ITR 11 1.1.1970 A.Y. 1971-72 (01.01.1961 operation of aircraft) * * Taxable only in source country No separate provision *For rate of tax and basis of taxation refer to the DTAA provisions. MLI effective from 1/4/2021. Please see note 1 for MLI impact. 90. United Kingdom 206 ITR 235 01.04.1994 A.Y. 1995-96 15 @* 10 @ 15 @** 10 @ [See Note 2] [See Note 2] *Dividend taxable @15% where those dividends are paid out of income derived directly or indirectly from immovable property within the meaning of Article 6 by an investment vehicle which distributes most of this income annually and whose income from such immovable property is exempted from tax, in all other cases 10%.
Double Taxation Avoidance Agreements 5.121 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Sl. No. DTAA between India and Effective date in India Tax rate on Remarks Dividend (See Note 8) (%) Interest (%) Royalties (%) See Note 4 Technical Service Fees (%) See Note 4 Refer Note 9 for transactions between special relationship holders. **Refer Note 10 for exempted entities. Protocol replaces Article 28- Exchange of Information to make it more comprehensive. For LOB Clause – Refer Note 7. MLI effective from 1/4/2020. Please see note 1 for MLI impact. 91. United States of America 187 ITR 102 1.4.1991 A.Y. 1992-93 15 @ 25 @ 10 @ 15 @ [See Note 2] [See Note 2] 15% tax on dividends if at least 10% of the voting stock is owned by Company, in other cases 25%. Interest taxable at 10% if recipient is bonafide bank or financial institution, in other cases 15%. Technical Services termed as included services. Refer Note 9 for transactions between special relationship holders. Treaty has LOB clause and P.E. Tax Articles. Protocol is very important. For LOB Clause – Refer Note 7. 92. Uruguay CBDT Circular No. F.No.500/138/2002- FTD-II 1.4.2014 A.Y. 2015-16 5 @ *10 @ 10 @ 10 @ *Refer Note 10 for exempted entities. For LOB Clause – Refer Note 6. MLI effective from 1/4/2021. Please see note 1 for MLI impact. 93. Uzbekistan 223 ITR 60 349 ITR 171 1.4.1993 A.Y. 1994-95 1.4.2013 A.Y 2014-15 10 @ *10 @ 10 @ 10 @ Interest received from transaction approved by source country’s Government will be exempt. In other cases, normal provision of domestic tax law will apply. Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. Protocol replaces Article 28- Exchange of Information to make it more comprehensive. For LOB Clause – Refer Note 6. 94. Vietnam (Socialist Republic of Vietnam) 214 ITR 137 1.4.1996 A.Y. 1997-98 10 @ *10 @ 10 @ 10 @ Refer Note 9 for transactions between special relationship holders. *Refer Note 10 for exempted entities. 95. Zambia 146 ITR 233 A.Y. 1979-80 5 + 15 + *10 + 10 + 10+ Dividend taxable at 5% if the recipient is a company which holds at least 25% of the shares during at least 6 months before the date of payment and at 15% in all other cases. *Refer Note 10 for exempted entities. Article 14 is titled ‘Management and Consultancy Fees’.
FEMA and International Taxation 5.122 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Notes: 1. As signatory to the Multi-Lateral Instrument (MLI), India has deposited the Instrument of Ratification to OECD, Paris on 25th June 2019 along with its Final Position in terms of Covered Tax Agreements (CTAs), Reservations, Options and Notifications under the MLI, as a result of which MLI will enter into force for India on 1st October, 2019 and its provisions will have effect on India’s DTAAs from FY 2020-21 onwards. Please see note on MLI for further information. It may be noted that to avail the lower withholding tax rate on dividend, interest, royalty and fees for technical services as per the relevant tax treaty, eligibility to claim tax treaty benefits, and therefore satisfaction of pre-requisites including satisfying beneficial ownership condition; meeting specified threshold limits; classification as per definition of various terms; satisfaction of Principal Purpose Test where applicable; etc.; now gain even more significance. Where MLI provisions match, the treaty language would change. Please refer to synthesised text of treaties on income-tax website or refer to BCAS’s publication – MLI Decoded at https://www.bcasonline.org/Files/ ContentType/attachedfiles/index.html and Compendium on MLI(online). 2. In most cases the aforesaid rates of tax are on gross income but in some cases, tax is levied on the net income and, hence, each article of the respective agreement/s must be carefully analyzed and applied. 3. In the Country of Source, Royalties and Fees for Technical Services are taxed at following rates: 1. 10% for Equipment Rental and for Services ancillary or subsidiary thereto. 2. for other cases. 1. during 1st 5 years of Agreement 15% if Government or Specified Organization is payer, 20% for other payers 2. subsequent years, 15% in all cases Income of Government/ Government Organizations exempt from Taxation in Country of Source. 4. Pages referred to in citation are statute page Nos. @ - Beneficial Ownership required + - Beneficial Ownership may not be required. 5. The rate of tax under the Income-tax Act, 1961 (‘the Act’) on royalty or fees for technical services receivable by a foreign company is as below: For agreements made on or after 1 April 1976 –10% (*With effect from 1 April 2016 i.e. A.Y. 2016-17). As per Section 90(2) of the Act, this rate may be adopted if it is lower than rate under DTAA. 6. Separate Limitation of Benefits Article to combat treaty shopping. Anti-avoidance provisions under domestic law will override treaty. 7. Separate Limitation of Benefits Article to combat treaty shopping. 8. Taxability of Dividend under the Act: With effect from 1 April 2020, Dividend from shares and units received shall be taxable in the hands of shareholder (residents and non-residents) under the Act. Non-resident shareholders can access treaty for rate relief wherever applicable. Please note that generally dividend article in most of the treaties does not include relief for units, hence one needs to analyse treaty relief accordingly. 9. Where, owing to special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest/royalty/fees for technical services paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence
Double Taxation Avoidance Agreements 5.123 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain according to the law of each Contracting State, due regard being had to the other provisions of this Convention. 10. Dividend / Interest derived and beneficially owned by specified entities is exempt. Each treaty specifies these entities which in general include the Government of the Contracting States, the RBI, EXIM Bank of India, National Housing Bank, etc., and the Central Bank and certain other entities of the other contracting state. Kindly refer to the treaty for the full list. 11. MFN clause available whereby exemption, lower rate or restricted scope can apply to dividends, interest, royalties and/or FTS on account of another treaty signed between India and an OECD Member Country after signing of this treaty. Please refer to text of treaty for applicability and conditions. Indian treaties with Slovenia, Lithuania & Columbia have a favourable rate as compared to earlier treaties and are OECD Member countries. However, these countries have become members of OECD only recently. CBDT has issued Circular No. 3/2022 clarifying several aspects for conditions which are applicable for such relief. 12. Tax compliance requirements: Information is required to be submitted by the payer as per rule 37BB by filing appropriate Forms – Form 15CA, Form 15CB and/or Form 15CC as the case may be. To claim treaty benefit, payee must have following documents in place: 1. Valid Tax Residency Certificate for the period in which income is earned; 2. Duly filled Form 10F1 along with supporting documents; 3. No permanent establishment certificate; 4. Declaration as required to support the claims made by the non-resident earner including those for beneficial ownership, holding period, etc. It should be noted that documents do not replace scrutiny that a deductor needs to make of the facts claimed by the payee before providing relief under a treaty. TDS return needs to be filed for deduction of tax at source. Also, with effect from 1.4.2020, nonresidents/foreign companies who are not required to file tax return in India as per Section 115A(5)can continue to enjoy the relief provided taxes are withheld at rate not lower than the rate prescribed under section 115A(1)(a) or (b), i.e., tax rate plus surcharge and cess. 13. The positions in this rate chart are as per notifications issued till 31st March 2023. The document is only a guidance towards the rates as per the treaties read along with various provisions. The document should not be taken as advice and practitioners are advised to go through the relevant DTAA and its provisions for deciding on final rate applicable. BCAS does not advocate using this document as an opinion on the aspects mentioned herein. 14. List of important Circulars on DTAA and Income of Non Residents in India: 1. Now, it is mandatory to furnish Form 10F electronically. However, for certain category of Non-resident Taxpayers who are not having PAN and not required to have PAN as per relevant provisions of Income-tax Act,1961 are exempted from mandatory electronic filing of Form 10F till 31st March 2023.
FEMA and International Taxation 5.124 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Circular / Notification No. & Date Matter No. 5 DT. 28-09-2004 Taxation of business process outsourcing units of Non-Residents in India. (Revised, withdrawing Circular No. 1 dated 02-01-2004 [265 ITR (St.) 0023]) No. 1 of 2004 DT. 02-01-2004 Taxation of business process outsourcing units of Non-Residents in India. No. 1 of 2003 DT. 10-02-2003 Residential status under Indo Mauritian Tax Treaty. No. 10 DT. 09-10-2002 Submission of No Objection Certificate in case of remittance to a non-resident No. 787 DT. 10-02-2000 Taxation of income of artists, entertainers, sportsmen etc. from international/local events. No. 742 DT. 02-05-1996 No. 765 DT. 15-04-1998 No. 6/2001, dated 5-3-2001 Taxation of foreign telecasting companies. No. 740 DT. 17-04-1996 Taxability of remittance of interest by Branch of a foreign bank to its head office. No. 734 DT. 24-01-1996 Rates of TDS under DTAA between India & U.A.E. No. 728 DT. 30-10-1995 Clarification regarding rate of TDS u/s. 195 for remittance, clarified that such rates shall be as provided in relevant Finance Act or in DTAA whichever is more beneficial to the assessee. No. 588 DT. 02-01-1991 Taxability of import of system software from Non Residents. No. 333 DT. 02-04-1982 A conflict in application of DTAA and provisions of Income-tax Act, 1961, clarified that beneficial provision shall apply. No. 108 DT. 20-03-1973 In relation to exchange of information between the countries for preventing evasion or avoidance of taxes and recovery thereof. Nos. 90 and 91/ 2008 DT 28- 08-2008 Where treaty provides that any income of an Indian Resident “may be taxed” in the other country, such income shall be included in the total Income of such resident and relief shall be available as per DTAA. CBDT Instruction No. 3 /2004 dated 19-03-2004 Suspension of collection of taxes during operation of Mutual Agreement Procedure in respect of India-UK DTAA Circular No.7/2009 [F .No. 500/135/2007-FTD-I] dated 22 October 2009 Circular No 23 dated 23rd July 1969 and Circular No 163 dated 29th May, 1975 (both relating to taxability and accrual of Income of Non-resident in India) are withdrawn. Further, Circular No. 786 dated 7th February 2000 (relating to clarification of taxability of export commission in the hands of non-resident in India) is also withdrawn Circular No.7 dated 23 October 2007 amended on 27 September 2011 The CBDT has laid down the procedure for refund of tax deducted at source under Section 195 of the Income-tax Act, 1961 to the person deducting tax at source from the payment to a non-resident. Refund will now be available to residents who have deducted tax at a higher rate, relying on a Tax Treaty, while a lower rate of tax deduction has been prescribed under domestic law.
Double Taxation Avoidance Agreements 5.125 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Circular / Notification No. & Date Matter Notification No.57/2013/ F.No.142/16/2013-TPL The CBDT has amended Rule 21AB of Income Tax Rules, 1962. As per the amendment, subject to provisions of Section 90 and 90A of the Act, if the TRC doesn’t contain specified details viz. status of the taxpayer, country of registration, PAN, tax identification number etc.; non-resident taxpayer to furnish the same through Form 10F. Notification No. 93/2009 dated 9 December 2009 “The territory in which the taxation law administered by the Ministry of Finance in Taipei is applied” has been notified as ‘Specified Territory’ and “India-Taipei Association in Taipei” and “Taipei Economic and Cultural Centre in New Delhi” have been notified as ‘Specified Association’ under Section 90A of the Income-tax Act, 1961. Notification No. 22/2010/F. No. 142/5/2010-SO(TPL) dated 8 April 2010 The following areas outside India have been notified as ‘Specified territory’ under Section 90 of the Income-tax Act, 1961: i. Bermuda; ii. British Virgin Islands; iii. Cayman Islands; iv. Gibraltar; v. Guernsey; vi. Isle of Man; vii. Jersey; viii. Netherlands Antilles; ix. Macau Notification No. 25/2010 [F. No. 500/124/97-FTD-II], dated 20 April 2010 Hong Kong Special Administrative Region of the People’s Republic of China has been notified as ‘Specified territory’ under Section 90 of the Income-tax Act, 1961 Notification No. 54/2012 [F. No. 503/14/2012-FTD-I(PT), dated 17 December 2012 Sint Maarten, a part of Kingdom of Netherlands, has been notified as ‘Specified territory’ under Section 90 of the Income-tax Act, 1961 Notification No F.No.504/05/2003-FTD-I Cyprus has been notified as ‘notified jurisdictional area’ under Section 94A of the Income-tax Act, 1961 Notification No.03/2011-FTDII [F .No. 500/96/97-FTD_II] dated 10 January 2011 Agreement among Governments of SAARC Member States for avoidance of double taxation and mutual administrative matters is effective from 1st April 2011 Notification No. 05/2011/F. No.503/2/2009-FTD-I Tax Information Exchange Agreement between India and Bermuda signed on 7th October 2010 Notification No. 25/2011/ F. No. 503/6/2009-FTD-I Tax Information Exchange Agreement between India and Bahamas signed on 11th February 2011 Notification No. 26/2011/ F. No. 503/01/2008-FTD-I Tax Information Exchange Agreement between India and Isle of Man was signed on 4 February 2011 Notification No .54/2011/ F. No. 503/10/2009-FTD-I Tax Information Exchange Agreement between India and British Virgin Islands signed on 9 February 2011 Press Note / Release No. 402/92/2006-MC (43 of 2011) Notification No. 61/2011/ F. No. 503/03/2009-FTD-I Tax Information Exchange Agreement between India and Cayman Islands was signed on 21st March 2011
FEMA and International Taxation 5.126 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Circular / Notification No. & Date Matter Notification No. 26/2012/ F. No. 503/6/2008-FTD-I Tax Information Exchange Agreement between India and Jersey was signed on 3st November 2011 Notification No. 30/2012/ F. No. 503/01/2009-FTD-I Tax Information Exchange Agreement between India and Guernsey was signed on 20 December 2011 Notification No. 32/2012-FTTR-II/ F.No.503/02/2010-FT&TR-II Tax Information Exchange Agreement between India and Liberia was signed on 3st October 2011 Notification No.43/2012- FT&TR-II/ F.No.503/04/2009-FT&TR-II Tax Information Exchange Agreement between India and Macao Special Administrative Region of the People’s Republic of China was signed on 03 January 2012 Notification No. 22/2013/504/3/2010 FTD-II Tax Information Exchange Agreement between India and Argentina was signed on 21st November 2011. Notification No. 28/2013 [F.No.503/11/2009-FTD-I Tax Information Exchange Agreement between India and Gibraltar was signed on 1st February 2013. Notification No. 43/2013/ F. No. 503/4/2009 – FTD-I. Tax Information Exchange Agreement between India and Monaco was signed on 31st July 2012. Notification No. 3/2014/ F. No. 503/4/2012-FTD-I Tax Information Exchange Agreement between India and Belize was signed on 18th September 2013. Notification No. 44/2013/ F.No.501/03/1994-FT&TR-II dated 19 June 2013 Tax Information Exchange Agreement between India and Bahrain was signed on 31st May 2012. Notification No. 30/2014/F. No. 503/4/2009-FTD-I dated 6 June 2014 Tax Information Exchange Agreement between India and the Principality of Liechtenstein was signed on 28th March 2013. Notification No. 63/15/F. No.500/02/2003-FTD-I dated 12 August 2015 Tax Information Exchange Agreement between India and San Marino signed on 29th August 2014. Notification No. 48/2011/ F. No. 500/02/2001/FTD-II Agreement between India – Taipei Association In Taipei and Taipei Economic and Cultural Center in New Delhi for Avoidance of Double Taxation and the prevention of Fiscal Evasion with respect to Taxes on Income shall be effective from 1st April 2012. The Agreement notifies the following rates for taxes on income:- a. Dividend – 12.5%@ b. Interest – 10%@ Interest will be exempt if derived and beneficially owned by i. The authority administering a territory, a sub-division or a local authority of other territory; or ii. Central Banks and EXIM Banks of the territories referred above; or iii. Any other institution as may be identified and accepted from time to time by competent authorities of both the territories. c. Royalty and Fees for Technical Services – 10%@
Double Taxation Avoidance Agreements 5.127 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Circular / Notification No. & Date Matter Notification No. 77/2015/F. No.500/137/2011/-FTD-I dated 30 September 2015 Memorandum of Understanding between India and United States of America to improve International Tax Compliance and to implement Foreign Account Tax Compliance Act (‘FATCA’) of the United States of America. The provisions of the said Agreement will be given effect from 31st August 2015. Notification No. 62/2016 F. No. 503/09/2009-FTD-I dated 21 July 2016 Tax Information Exchange Agreement between India and Saint Kitts and Nevis signed on 11 November 2014. Notification No. 77/2016/F. No.503/4/2013-SO/FT&TRII(1) dated 2 September 2016 Agreement between India and Maldives for avoidance of double taxation of income derived from international air transport signed on 11 April 2016. Notification No. 80/2016/ F. No. 503/07/1993-FT&TR-IV dated 8 September 2016 Tax Information Exchange Agreement between India and Seychelles signed on 26 August 2015. Notification No. So 2826(E) [No.82/2017 (500/5/2009-FtdIi)], Dated 30-8-2017 Amendment of Art. 26 dealing with Exchange of Information in DTAA between India and Vietnam Notification No. So 3452(E) [No.90/2017 (F.No.501/04/1992-Ftd-I], Dated 27-10-2017 Amendment of Art. 26 dealing with Exchange of Information in DTAA between India and Slovenia Notification No. So 3512(E) [No.93/2017 (F.No.501/1/83/- Ftd.Ii)], Dated 2-11-2017 Amendment of Art. 26 dealing with Exchange of Information in in DTAA between India and New Zealand Notification No. So 93(E) [F.No.500/101/2006-Ft&Tr-V], Dated 4-1-2018 Amendment of Art. 26 dealing with Exchange of Information in in DTAA between India and Brazil Notification No. So 1328(E) [No.15/2018 (F.No.503/10/95- Ftd-Ii)], Dated 23-3-2018 Amendment of Article 26 for Exchange of Information in DTAA between India and TAJIKISTAN Notification No. So 1589(E) [No.20/2018 (F.No.501/06/94- Ftd-Ii)], Dated 12-4-2018 Various changes in DTAA between India and Kazakhstan NOTIFICATION NO.4724(E) [NO.43/2018 (F.NO.503/05/1) Dated – 11/09/2018 Amendment of Article 26 for Exchange of Information in DTAA between India and Portugal. NOTIFICATION NO. SO 2562(E) [NO.54/2019 (F.NO.503) Dated 17/07/2019 Various changes in DTAA between India and China. Notification No. 57/2019/F. No. 500/71/2015-FTD-I dated 09/08/2019 Notification of the Multilateral Convention to Implement Tax Treaty Related Measures toPrevent Base Erosion and Profit Shifting
FEMA and International Taxation 5.128 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication Circular / Notification No. & Date Matter Notification No. 58/2019/F. No. 503/02/1986-FTD-I dated 27/08/2019 Various changes in DTAA between India and Spain. Notification No.84/2019/F. No. 503/09/2009-FTD-II dated 22/10/2019 Introduction of Art. 26 dealing with Exchange of Information in DTAA between India and Morocco. Notification No. 14/2020 F.No.503/02/2012-FTD-II dated 04/03/2020 Agreement for the Exchange of Information and Assistance in Collection of taxes between India and Brunei signed on 28th February 2019 Notification No.22/ F.No. 505/01/1982-FTD-I (Pt.) dated 24/04/2020 Protocol amending the DTAA between India and Austria for inserting Articles for Exchange of Information and Assistance in Collection of taxes signed on 6th February 2017 Notification No. 23/2020/ F.No. 370142/31/2019-TPL Amendment of Mutual Agreement Procedure (MAP) laid down in the Income-tax Rules, 1962 Notification S.O. No. 1442(E) [NO.29/2021/F.NO.501/03/92- FTD-II] dated 01-04-2021 Section 90 of The Income-Tax Act, 1961 - Agreement Between Government of Republic of India and Government of Islamic Republic of Iran for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to taxes on Income Notification S.O. 5094(E) [NO.135/2021/ F. NO. 503/07/95-FTD-II] dated 08-12-2021 Section 90 of The Income-Tax Act, 1961 - Double Taxation Relief - Protocol amending Agreement between Government of Republic of India and Government of Kyrgyz Republic for Avoidance of Double Taxation and for Prevention of Fiscal Evasion with respect to taxes on Income Circular No. 3/2022 [F.No. 503/1/2021-FT&TR-I] dated 03-02-2022 Clarification regarding the Most-Favoured-Nation (MFN) clause in the Protocol to India's DTAAs with certain countries Notification [No.03/2022/ F. No. DGIT(S)-ADG(S)- 3/e-Filing Notification/ Forms/2022/3813] dated 16-07-2022 Specifying Forms, returns, statements, reports, orders, by whatever name called, prescribed to be furnished electronically which includes Form 10F Notification [F. No. DGIT(S)- ADG(S)-3/e-Filing Notification / Forms / 2022 / 9227] dated 12-12-2022 Partial relaxation with respect to electronic submission of Form 10F by select category of taxpayers in accordance with the DGIT (Systems) Notification No. 3 of 2022. Notification [F. No. DGIT(S)- ADG(S)-3/e-Filing Notification / Forms / 2023 /13420] dated 28-03-2023 Partial relaxation with respect to electronic submission of Form 10F by select category of taxpayers in accordance with the DGIT (Systems) Notification No. 3 of 2022. 2
Double Taxation Avoidance Agreements 5.129 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication
FEMA and International Taxation 5.130 R7ima5ine Celebrating 1949 - 2023 BCAS REFERENCER 2023-24 61 Years of Continuous Publication