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India Signs Double Taxation Avoidance Agreement With Myanmar
New Delhi, April 04, 2008
India has signed a Double Taxation Avoidance Agreement (DTAA)
with the Government of Myanmar. The agreement signed on 2nd
April aims at avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income. The
Agreement was signed by P.K. Misra, Chairman, Central Board of
Direct Taxes on behalf of India and by Kyi Thein, Ambassador
Extraordinary and Plenipotentiary of the Union of Myanmar to
India, on behalf of the Government of the Union of Myanmar.
The signing of agreement coincides with the visit of H.E.
Maung Aye, Vice Senior General and Vice Chairman, State Peace
and Development Council of Myanmar to India.
The DTAA will cover income-tax and surcharge in the case of
India and the income tax and profit tax in the case of
Myanmar. The Agreement provides that business profits will be
taxable in the source state if the activities of an enterprise
constitute a permanent establishment in the source state.
Examples of permanent establishment include a branch, factory,
place of management, sales outlet etc.
Profits of a construction, assembly or installation
projects will be taxed in the state of source if the project
continues in that state for 270 days or more. Profits derived
by an enterprise from the operation of ships or aircraft in
international traffic shall be taxable in the country of
residence of the enterprise. Dividends, interest and royalty
income will be taxed both in the country of residence and in
the country of source. However, the maximum rate of tax to be
charged in the country of source will not exceed 5% in the
case of dividends and 10% in the case of interest and
royalties.
Capital gains from the sale of shares will be taxable in
the country of source. The Agreement also incorporates
provisions for exchange of information between tax authorities
of the two countries and incorporates anti-abuse provisions to
ensure that the benefits of the Agreement are availed of by
the genuine residents of the two countries.
Double Taxation Avoidance Agreement with Myanmar is expected
to provide tax stability to the residents both the countries
and facilitate mutual economic cooperation as well as
stimulate the flow of investment, technology and services
between India and Myanmar.
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