Different DTAA Agreements are as below:-
We at Talent Cabin India offer advisory services to Indian Clients, Multinational Clients having interest in India and NRI for better tax management keeping in view the laws of India as well as overseas countries and Double Taxation Avoidance Agreements (DTAA) if any executed.
ROLE OF TAX TREATIES IN INTERNATIONAL TAX PLANNING
- Facilitates investment and trade flow, prohibiting discrimination between tax payers; Adds fiscal certainty to cross border operations; Prevents international evasion and avoidance of tax; Facilitates collection of international tax; Contributes acquisition of international development objective, and Avoids double taxation of income by allocating taxing rights between the source country where income arises and the country of residence of the recipient; thereby promoting cooperation between or amongst States in carrying out their responsibilities and guaranteeing the stability of tax burden.
- Thus, tax incidence, becomes a necessary factor influencing the non-residents in deciding about the location of their investment, services, technology etc. Tax treaties serve the purpose of providing protection to tax payers against double taxation and therefore preventing the discouragement which taxation may provide in the free flow of international trade, international investment and international transfer of technology.Additionally, such treaties contain provisions for mutual exchange of information and for mitigating litigation by providing for mutual assistance procedure.
- The agreements allocate jurisdiction between the source and residence country. Wherever such jurisdiction is given to both the countries, the agreements
- Specify maximum rate of taxation in the source country which is generally lower than the rate of tax under the domestic laws of that country. The double taxation in such cases are prevented by the residence country agreeing to give credit for tax paid in the source country thereby reducing tax payable in the residence country by the amount of tax paid in the source country.
These agreements give the right of taxation in respect of the income of the nature of interest, dividend, royalty and fees for technical services to the country of residence. However, the source country is also given the right but such taxation in the source country has to be restricted to the rates specified in the agreement.
- So far as income from capital gains is concerned, gains arising from transfer of immovable properties are taxable in the country where such properties are located. Gains arising from the transfer of movable properties forming part of the business property of a ‘permanent establishment ‘or the ‘fixed base‘is taxed in the country where such permanent establishment or the fixed base is placed.