India and UK Amended pact on Avoidance of Double Taxation

India and the United Kingdom on 30 October 2012 signed a protocol amending the 1993 bilateral convention on avoidance of double taxation and prevention of fiscal evasion related to taxes on income and capital gains.

The Protocol amends the pact or Convention that was originally assigned on 25 January 1993 in New Delhi

The protocol was signed by India’s High Commissioner Jaimini Bhagwati and Exchequer Secretary to the U.K. Treasury, David Gauke.

The amended protocol is going to provide tax stability to the residents of both the countries and also facilitate mutual economic cooperation with stimulating flow of investment, technology and services.

Also, the withholding taxes on the dividends would be 10 per cent or 15 per cent and is equally applicable in the UK and in India.

The Protocol integrates provisions for effective exchange of information between tax authorities of the two countries in line with latest international standards including exchange of banking information and supplying of information irrespective of domestic interest.

With the amendment there will now be a new article in the Convention on assistance in collection of taxes. It includes provision for taking measures of conservancy.

The Protocol also constitutes the Convention anti- abuse (limitation of benefits) provisions which ensure that the benefits of the Convention are not misused.