India and Switzerland yesterday signed the revised Double Taxation Avoidance Agreement (DTA), a move that that does not compromise Switzerland's banking secrecy laws.
|The Union Finance Minister, Shri Pranab Mukherjee and the Foreign Minister of Switzerland, Ms. Micheline Calmy Rey signing a protocol amending the existing Double Taxation Avoidance Agreement between India and Swiss Federal Council, in New Delhi |
The revised DTA in the area of taxes on income was signed in New Delhi by finance minister Pranab Mukherjee and Swiss foreign minister Micheline Calmy-Rey.
The revised DTA contains provisions on the exchange of information in accordance with the OECD standard, which were negotiated in line with the parameters decided by the Swiss Federal Council.
''The protocol will be the basis or the institutional framework for getting information from Switzerland in cases where there are instances of evasion,'' Banashree Bose Harrison, joint secretary in the ministry for external affairs told media yesterday.
Under the amended DTA, dividends, interest, royalties and payments for technical services, there are provisions for the lowest withholding tax rate, which India has with other OECD countries, will automatically, apply to Switzerland also.
Taxation of profits from shipping companies operating internationally will also be governed by the protocol, thereby avoiding double taxation. In future, shipping companies operating internationally will have to pay taxes on their profits solely in the country in which they are domiciled.