New Delhi, Feb 23 (.) During the recent visit of President Emmanuel Macron, India and Government of French Republic signed a protocol amending India-France Double Taxation Avoidance Convention (DTAC) which was signed in 1992, an official statement said on Monday.
The amending protocol provides full taxing rights in respect of capital gains arising from sale of shares of a company, to the jurisdiction where such company is a resident. Moreover, it also deletes the so-called ‘Most-Favored Nation (MFN)’ clause from the protocol of DTAC, bringing to meet all issues relating to it.
The amendment also modifies the taxation of income from dividends by replacing a single rate of 10pc of tax with a split rate of 5pc for those holding at least 10 per cent of capital and 15 pc of tax for all other cases.
This protocol also modifies the definition of ‘fees for technical services’ by aligning it with the definition in India US Double Taxation Avoidance Agreement and expands the scope of ‘Permanent Establishment’ by adding Service PE, the official statement added.
Moreover, the amending protocol also updates the provisions of exchange of information and introduces a new article on assistance to collection of taxes as per international standards.
It will enable the seamless exchange of information and strengthen mutual tax cooperation between India and France. The amending protocol will also provide greater tax certainty to taxpayers and boost the flow of investment, technology, and personnel between India and France.
. SAS PRS