The Indian government approved the revised DTAA on May 6, 2015 in a cabinet meeting. The official text is expected to be available soon.
The revised DTAA provides for source based taxation of capital gains, provisions for making adjustments to profits of associated enterprises on the basis of arm’s length principle, provides for residence based taxation of shipping income, provisions for service of permanent establishment, rationalizes tax rates in the articles on dividend, interest and royalties and fees for technical services, it added.
The agreement further incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities and also incorporates limitation of benefits provisions, to ensure that the benefits of the agreement are availed of by genuine residents of both countries.
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