Agreement Signed
between the Republic of India and the Republic of Albania for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on
Income and on Capital
The
Government of India signed here today an Agreement for Avoidance of Double
Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income
and on Capital (DTAA) with Government of Albania. The Agreement was signed by
Dr. Sudha Sharma, Chairperson, Central Board of Direct Taxes (CBDT), on behalf
of the Government of India and Mr. Fatos Kerciku, Ambassador, Republic of
Albania on behalf of the Government of Albania.
The
DTAA provides that business profits will be taxable in the source state if the
activities of an enterprise constitute a Permanent Establishment (PE) in the
source state. The Agreement provides for fixed place PE, building site,
construction & installation PE, service PE and agency PE.
The
Agreement incorporates para 2 in Article 9 concerning Associated Enterprises.
This would enhance recourse to Mutual Agreement Procedure to relieve double
taxation in cases involving transfer pricing adjustments.
Dividends,
Interest and Royalties & Fees for Technical Services income will be taxed
both in the country of residence and in the country of source. The low level of
withholding rates of taxation for dividend (10%), interest (10%) and royalties
& fees for technical services (10%) will promote greater investments, flow
of technology and technical services between the two countries.
The
Agreement further incorporates provisions for effective exchange of information
between tax authorities of the two counties in line with latest international
standard, including exchange of banking information and supplying of
information without recourse to domestic interest.
The Agreement also contains an Article on Assistance in Collection of Taxes. This article also includes provision for taking measure of conservancy. The Agreement incorporates anti-abuse (limitation of benefits) provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.
The Agreement also contains an Article on Assistance in Collection of Taxes. This article also includes provision for taking measure of conservancy. The Agreement incorporates anti-abuse (limitation of benefits) provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.
The
Agreement will provide tax stability to the residents of India and Albania and
will facilitate mutual economic cooperation between the two countries. It will
also stimulate the flow of investment, technology and services between India
and Albania.
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