India, Japan sign protocol to update double taxation pact

The Dollar Business Bureau 

  India and Japan on Friday signed a protocol for amending the existing convention for the avoidance of double taxation and for the prevention of fiscal evasion in regards to taxes on income. The existing convention was signed in 1989. “The protocol signed today gains all the more importance as it is being signed few hours before the arrival of the Prime Minister of Japan in India,” Ministry of Finance said in a statement. The agreement was signed between India’s Revenue Secretary Hasmukh Adhia and Japan’s Ambassador to India Kenji Hiramatsu. The protocol will enable the two countries to exchange information on tax matters, including bank information and information without domestic tax interest, through internationally accepted standards. It will also ensure the flow of information from Japan in respect of Indian residents, and the information can be shared with other law enforcement agencies after approvals from the competent authority of Japan and vice versa.  The protocol also emphasises on a mutual assistance to each other in the collection of revenue claims. “The protocol further provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the government and the government owned financial institutions,” the ministry said.  

December 11, 2015  | 05:05pm IST