India and the
Republic of Fiji Sign Double Taxation Avoidance Agreement (DTAA) for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect
to Taxes on Income
The
Government of the Republic of India signed a Double Taxation Avoidance
Agreement (DTAA) with the Government of Republic of Fiji for the avoidance of
double taxation and for the prevention of fiscal evasion with respect to taxes
on income. The Agreement was signed here today by Shri P. Chidambaram, Union
Minister of Finance on behalf of the Government of India and by Mr. Aiyaz
Sayed-Khaiyum, Attorney General and Minister of Justice, Anti-Corruption,
Public Enterprises, Communications, Civil Aviation, Tourism, Industry and
Trade, on behalf of the Government of Republic of Fiji.
Speaking
on the occasion, the Finance Minister Shri P. Chidambaram said that the need
for the DTAA between the two countries was felt and negotiations were completed
in 2011. He said that the Agreement will provide tax stability to the residents
of India and Fiji and facilitate mutual economic cooperation as well as
stimulate the flow of investment, technology and services between India and
Fiji. The Finance Minister further said that the Agreement incorporates
provisions for an effective exchange of information and assistance in
collection of taxes between tax authorities of the two countries including
exchange of banking information.
The
DTAA provides that business profits will be taxable in the source State if the
activities of an enterprise constitute a permanent establishment in the source
state. Profits derived by an enterprise from the operation of aircraft in
international traffic shall be taxable in the country of place of effective
management of the enterprise. Dividends, interest, royalty income and fees for
technical or professional services will be taxed both in the country of
residence and in the country of source. However, the maximum rate of tax to be
charged in the country of source will not exceed the prescribed limit for such
dividends, interest, royalties and fees for technical services. Capital gains
from the sale of shares will be taxable in the country of source. The Agreement
also incorporates anti-abuse provisions to ensure that the benefits of the
Agreement are availed of only by the residents of the two countries and to
prevent any abuse of treaty.
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