India, France amend DTAC; capital gains to be taxed on basis of residency of company
GS3अर्थव्यवस्था · विज्ञान-तकनीक · पर्यावरण · सुरक्षा· External sector, trade & FDI· Prelims + Mains·
चर्चा में क्यों
India and France signed an amending protocol to their Double Taxation Avoidance Agreement (DTAA) to provide certainty in taxation and strengthen economic ties.
पृष्ठभूमि
The amending protocol modifies the taxation of income from dividends and capital gains, and defines 'Fees for Technical Services' and 'Permanent Establishment'. It also introduces a new Article on assistance in tax collection and updates exchange of information provisions.
प्रीलिम्स के लिए तथ्य
- तथ्यCapital gains are now to be taxed on the basis of the residency of the company.
- तथ्यThe protocol defines 'Fees for Technical Services' and 'Permanent Establishment' for taxation purposes.
- तथ्यThe agreement includes a new Article specifically for assistance in tax collection.
- तथ्यThe amendments were signed during President Macron's visit to India.
मेन्स के लिए
Q. Discuss how bilateral Double Taxation Avoidance Agreements (DTAAs) serve as instruments for fostering economic cooperation and ensuring fiscal transparency between trading partners.
उत्तर के आयाम
- Fiscal certainty: Reducing ambiguity in dividend and capital gains taxation to encourage cross-border investment
- Information integrity: Strengthening exchange of information to curb illicit financial flows and tax evasion
- Regulatory alignment: Standardizing definitions of 'Permanent Establishment' to streamline corporate compliance
कीवर्ड: Double Taxation Avoidance Agreement · Capital Gains Tax · Permanent Establishment · Fiscal Transparency · Bilateral Trade · Tax Collection Assistance
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