Cabinet approves protocol amending convention between India and Brazil for avoidance of double taxation - (06 Nov 2019)
Direct Taxation
The Union Cabinet Chaired by the Prime Minister approved the signing of the Protocol amending the Convention between India and Brazil for the avoidance of double taxation and to prevent fiscal evasion with respect to taxes on income. Implementation would be watched and reported by the Ministry. It aims to avoid the burden of double taxation for taxpayers of two countries in order to promote and thereby stimulate flow of investment, technology and services between India and Brazil. The revised DTAC will bring transparency in tax matters; help curb tax evasion and tax avoidance, remove double taxation.
The Protocol updates the provisions in the DTAC for exchange of information as per international standards. The Amending Protocol between India and Brazil will facilitate elimination of double tax. Further, clear allocation of taxing rights between Contracting States through DTAC will provide tax certainty to investors & businesses of both countries. The Amending Protocol will further augment the flow of investment through lowering of tax rates in source State on interest, royalties and fees for technical services. The Amending Protocol implements minimum standards and other recommendations of G-20 OECD Base Erosion Profit Shifting (BEPS) Project. A Preamble Text, a Principal Purpose Test, a general anti abuse provision in the DTAC along with a Simplified Limitation of Benefits Clause as per BEPS Project will be included to curb tax planning strategies which exploit gaps and mismatches in tax rules.
The existing DTAC between India and Brazil was signed on 26th April, 1988 and was amended through a Protocol signed on 15th October 2013 in respect of exchange of information. Through the present Protocol, changes have been made on various other aspects. The existing Double Taxation Avoidance Convention (DTAC) between India and Brazil being very old was required to be amended to bring it in line with international developments and also to implement the recommendations contained in the G20 OECD Base Erosion and Profit Shifting Project (BEPS).
Tags : CONVENTION APPROVAL DOUBLE TAXATION
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