The Union Government of India and Government of Albania on 8 July 2013 signed an Agreement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to the Taxes on Income and on Capital (DTAA). The agreement was signed to provide tax stability for the residents of both the nations. It would also facilitate mutual economic cooperation between the two countries. The signed agreement would also stimulate the flow of investment, technology and services between India and Albania.
The agreement incorporates provisions for effective exchange of information between tax authorities of the two countries, which also includes exchange of banking information and supply of information without recourse to domestic interest.
Major Points of the Agreement Signed
• Business profits would be taxable in the source state if the activities of the enterprise constitute a Permanent Establishment (PE) in that state. It provides fixed place PE, building Site, Service and Agency PE as well as Construction and Installation of PE.
• Para 2 of Article 9 of the agreement incorporates concerns related to Associated Enterprises and thus involves recourse to Mutual Agreement Procedures for relieving double taxation in cases that involves transfer pricing adjustments
• The signed agreement makes Dividends, Interest and Royalties & Fees for Technical Services income taxable in both the countries, the country of source and residence. The withholding rates of taxation for dividend, interests and royalties & fees for technical services of 10 percent each will help in promoting investment, technology and technical services flow between the two nations.
• The Agreement also has the provisions for effective exchange of information between tax authorities of the two counties in line with latest international standard. It includes exchange of banking information and supplying of information without recourse to domestic interest.
• An article on the Assistance in Collection of Taxes is also mentioned under the Article and includes provisions to take measures on conservancy. It includes 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 was signed by the Chairperson of Central Board of Direct Taxes, Dr. Sudha Sharma and the Ambassador of Republic of Albania, Fatos Kercikuon at New Delhi.
Who: India and Albania
Where: New Delhi
When: 8 July 2013