India and Japan on Friday signed a Protocol for amending the existing Convention for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income. | |
The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It further provides that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the competent authority of Japan and vice versa. | |
India and Japan have signed a Protocol for amending the existing convention for avoidance of double taxation and prevention of fiscal evasion with respect to income taxes.
The existing Convention for avoidance of double taxation and tax evasion was signed between both countries way back in 1989.
The protocol was signed by Revenue Secretary Hasmukh Adhia behalf of India while Kenji Hiramatsu, Ambassador of Japan signed on behalf of the Government of Japan.
Key highlights:
- Protocol provides for internationally accepted standards for effective exchange of information on tax matters.
- It includes sharing of bank information and information without domestic tax interest.
- Facilitates sharing of the information received from Japan of Indian resident with other law enforcement agencies with authorisation of the competent authority and vice versa.
- Under it both countries shall assist each other in the collection of revenue claims.
- It further provides for exemption of interest income from taxation in the source country.
- This exemption will be with respect to debt-claims insured by the Government or Government owned financial institutions.
India and Japan have inked a protocol for amending the existing convention for double taxation avoidance that provides for effective exchange of information in tax matters including bank accounts.
“The protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest,” the finance ministry said in a statement on Friday. The protocol was signed a few hours before the arrival of Japanese Prime Minister Shinzo Abe, whose visit is expected to boost flow of investments from both sides. India is eyeing large-scale investments from Japan in its infrastructure.
As per the protocol, the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the competent authority of Japan and vice versa. The amendment will allow India and Japan to assist each other in collection of revenue claims.
It also provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the government or government-owned financial institutions. The existing convention was signed in 1989.
Ahead of Japanese Premier Shinzo Abe’s visit, India and Japan have inked a pact for amending the double taxation avoidance agreement and for preventing fiscal evasion that was originally signed in 1989. The protocol provides for internationally accepted standards for effective exchange of information on tax matters, including bank information and information without domestic tax interest. It also allows for sharing of information from Japan on an Indian resident with other law enforcement agencies.
The pact would also allow the two countries to assist each other in collection of revenue claims. Further, it provides exemption of interest income from debt claims insured by the Government from taxation in the source country.