New Delhi, Feb 25: India and France have revised their three-decade-old tax treaty, a move expected to reduce dividend levies for major French investors while safeguarding India’s tax base and aligning the framework with global standards.
According to a report by BBC, the amended agreement lowers dividend tax to 5 per cent for French companies holding at least 10 per cent stake in an Indian firm, while raising it to 15 per cent for holdings below 10 per cent.
The changes are likely to benefit major corporations such as Sanofi, Renault, and L’Oréal, which have expanded their presence in India.
The revised treaty also expands New Delhi’s taxation rights over capital gains arising from share sales, including transactions where a French entity owns less than 10 per cent of an Indian company. It removes the Most-Favoured-Nation (MFN) clause that previously allowed French entities to claim lower tax rates in certain situations.
Global consultancy firm KPMG noted that the updated agreement realigns bilateral tax provisions with India’s current treaty policy and international standards, while promoting a stable investment environment.
Related posts :
Global Wind Day: Pralhad Joshi says wind energy is at centre of India’s green energy plan
Amitabh Kant steps down as G20 Sherpa, to now support free enterprise, startups
Centre kicks off ‘GST Pakhwada’ to mark 8 years of tax reforms
1st commercial consignment of premium cherries heads to Saudi Arabia, UAE: Piyush Goyal
EPFO tells members to avoid agents, use official portal for free services
TRAI finalises tariffs to boost retail broadband connectivity under PM-WANI scheme
