THE
Government of the Republic of India and the Government of the Republic
of Maldives signed two Agreements - for the Exchange of Information with
respect to Taxes and for the avoidance of double taxation of income
derived from international air transport on 11th April, 2016 during the
visit of Hon’ble President of Maldives to New Delhi.
The
Agreement for the Exchange of Information with respect to Taxes is
based on international standards of transparency and exchange of
information. It covers taxes of every kind and description imposed by
the Governments of India and Maldives. The Agreement enables exchange of
information, including banking information, between the two countries
for tax purposes, which will help curb tax evasion and tax avoidance.
The
Agreement will enhance mutual co-operation between the two countries by
having effective exchange of information in tax matters.
The
second Agreement provides for relief from double taxation for airline
enterprises of India and Maldives by way of exemption of income derived
by the enterprise of India from the operation of aircraft in
international traffic, from Maldivian tax and vice-versa. The object of
the Agreement is that profits from the operation of aircraft in
international traffic will be taxed in one country alone and accordingly
the taxing right is conferred upon the country to which the enterprise
belongs. The Agreement will provide tax certainty for airline
enterprises of India and Maldives.
The
Agreement further provides for Mutual Agreement Procedure for resolving
any difficulties or doubts arising as to the interpretation or
application of the agreement.
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