Union Cabinet approves DTAC agreement with Japan

Union Cabinet has approved signing and ratification of a protocol between India and Japan for amending the Double Taxation Avoidance Convention (DTAC).
It aims at avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
The protocol incorporates provisions for an effective exchange of information and assistance in collection of taxes between tax authorities of the two countries. It also includes exchange of banking information between tax authorities.
DTAC between both countries will facilitate:

• Exchange of information on tax matters including bank information and information without domestic tax interest as per accepted international standards.
• Sharing of any information received from Japan to Indian authority in respect of an Indian resident with other law enforcement agencies.
• Offer assistance to each other in matters related to collection of revenue claims as well as for exemption of interest income from taxation in the source country.
• In this regard the claim would be made with respect to debt claims insured by the government or government-owned financial institutions.

It should be noted that DTAC between India and Japan was signed in 1989 for avoidance of double taxation and prevention of fiscal evasion through a protocol.

Month: Current Affairs - December, 2015