India, Japan sign protocol to amend double taxation avoidance pact

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.

Month: Current Affairs - December, 2015