AS per
the understanding among the SAARC Member States arrived in 2005 at Dhaka,
India has notified the Limited Multilateral Agreement on Avoidance of
Double Taxation and Mutual Administrative Assistance Agreement in
tax matters. The agreement comes into force from May 19, 2010. Interestingly,
the Agreement which is applicable to Pakistan, Sri Lanka,
Nepal, Bhutan, Maldives and Bangladesh has only 17 Articles. There is
one full-fledged Article (11) which talks about sharing of tax policy
among the member states.
The
Agreement shall
be applicable only in the Member States where an adequate Direct Tax Structure
is in place. Further, in case of a Member State where such a structure is
not in place, this Agreement shall become effective from the date on which
such a Member State introduces a proper Direct Tax Structure and notifies
the SAARC Secretariat to this effect.
Further,
in the event of a conflict between the provisions of this Limited Multilateral
Agreement and that of any bilateral Double Taxation Avoidance Agreement between
the Member States, the provisions of the Agreement signed or amended at a
later date shall prevail.
Click here for the full text of the DTAA
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