India and China Amend Double Taxation Avoidance Agreement (DTAA)

; posted on
November 27th, 2018

The Government of the Republic of India and the Government of the People's Republic of China have amended the Double Taxation Avoidance Agreement (DTAA) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, by signing a Protocol on 26 November 2018. The official protocol has not been published yet, but according to the Indian Ministry of Finance, the amendment includes the adoption of the latest standard on EOI and minimum standard on BEPS project.

Exchange of Information

The Protocol updates the existing provisions for exchange of information to the latest international standards. The amended protocol reiterates that both countries may not decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

Both parties shall take all appropriate measures for the collection of information to provide the requesting party with the requested information, irrespective of the fact that the requested party does not need to have such information for the purposes of its own taxation to optimize the exchange of information.

Confidentiality, data safeguards and proper use of the information is laid out in the signing protocol under which the information shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, and the determination of appeals in relation to the taxes.

Minimum Standards

Further, the Protocol incorporates changes required to implement treaty related minimum standards under the Action reports of Base Erosion & Profit shifting (BEPS) Project, in which India had participated on an equal footing. Besides minimum standards, the Protocol brings in changes as per BEPS Action reports as agreed upon by the two parties.

Source: Indian Ministry of Finance (Press Release)

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