Cabinet
approves India-Chile double taxation avoidance treaty – 27th , November, 2019
The Union Cabinet approved the signing of the Double Taxation
Avoidance Agreement (DTAA) and protocol between India and Chile for elimination
of double taxation.
The Union Cabinet chaired by Prime Minister Narendra Modi
also approved the prevention of fiscal evasion and avoidance with respect to
taxes on income between the two countries.
Government said the DTAA will facilitate elimination of
double taxation."Clear allocation of taxing rights between contracting
states through the agreement will provide tax certainty to investors and
businesses of both countries while augmenting the flow of investment through
fixing of tax rates in source State on interest, royalties and fees for
technical services.
The release said that the agreement and protocol implements
the minimum standards and other recommendations of G-20 OECD Base Erosion
Profit Shifting (BEPS) Project.
Inclusion of Preamble Text, a Principal Purpose Test, a
general anti-abuse provision in the Agreement along with a Simplified
Limitation of Benefits Clause as per BEPS Project will result in curbing of tax
planning strategies which exploit gaps and mismatches in tax rules.
After Cabinet approval, necessary formalities for bringing
the Agreement and Protocol into force will be completed.
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