THE existing
Double Taxation Avoidance Convention between India and Japan was signed
on March 7, 1989 and was notified on March
1, 1990. The DTAC was subsequently
amended on February 24, 2006. A Protocol amending the DTAC between
India and Japan for the Avoidance of Double Taxation and the Prevention
of Fiscal evasion with respect to taxes on income which was signed on December
11, 2015 has entered into force on October
28, 2016 on completion
of procedural requirements by both countries.The Protocol amending the
DTAC aims to promote transparency and cooperation between the two countries.
The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It is further provided that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorization of the Competent Authority of Japan and vice versa.
The Protocol provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the Government/Government owned financial institutions.
The Protocol inserts a new article on assistance in collection of taxes. India and Japan shall now lend assistance to each other in the collection of revenue claims.
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