Patna HC: Possessing Cough Syrup With under 2.5% Codeine Without Authorisation Attracts the NDPS Act  ||  Madras HC: Person Who Converts to Islam Cannot Claim Backward Class Muslim Status  ||  Madras High Court Lays Down Guidelines For Surrogacy Custody and Parentage Applications  ||  Bombay High Court: Residence Proof is Mandatory For RTE Neighbourhood School Admissions  ||  Madras HC Strikes Down TN Law Mandating Registrar’s Title Verification Before Property Registration  ||  Bombay HC Allows Galli News to Report Medical Negligence But Bars Defamatory Hospital Imputations  ||  Supreme Court: Parents’ Loss Cannot Be Measured With Arithmetical Precision  ||  Supreme Court: Registered Sale Deed Remains Valid Despite Minor Attestation Discrepancies  ||  Calcutta High Court: Section 107 BNSS Property Attachment Cannot be Used as a Recovery Tool  ||  Ker HC: Elected Representatives Must Swear by God or Affirm, Cannot Invoke Specific Deities in Oath    

Cabinet approves protocol amending the Agreement between India and Sri Lanka for avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income- (Press Information Bureau) (12 Feb 2020)

MANU/PIBU/0398/2020

Direct Taxation

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Signing and Ratification of the Protocol amending the Agreement between India and Sri Lanka for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Impact:

Updation of preamble text and inclusion of Principal Purpose Test, a general anti abuse provision in the Double Taxation Avoidance Agreement (DTAA) will result in curbing of tax planning strategies which exploit gaps and mismatches in tax rules.

Details:

The existing DTAA between India and Sri Lanka was signed on 22nd January, 2013 and entered into force on 22nd October, 2013.

India and Sri Lanka are members of the Inclusive Framework and as such are required to implement the minimum standards under G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive Framework countries. Minimum standards under BEPS Action 6 can be met through the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) or through agreement bilaterally.

India is a signatory to the MLI. However, Sri Lanka is not a signatory to the MLI as of now. Therefore, amendment of the India-Sri Lanka DTAA bilaterally is required to update the Preamble and also to insert Principal Purpose Test (PPT) provisions to meet the minimum standards on treaty abuse under Action 6 of G-20 OECD Base Erosion & Profit Shifting (BEPS) Project.

Background:

The existing Double Taxation Avoidance Agreement (DTAA) between India and Sri Lanka was signed on 22nd January, 2013 and entered into force on 22nd October, 2013. India and Sri Lanka are members of the Inclusive Framework and as such are required to implement the minimum standards under G-20 OECD BEPS Action Reports in respect of their DTAAs with Inclusive Framework countries. Minimum standards under BEPS Action 6 can be met through the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) or through agreement bilaterally. India is a signatory to the MLI.

Tags : AGREEMENT   AMENDMENT   DOUBLE TAXATION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved