Over the years, India has developed relations with large number of foreign countries with the help of significant India Tax Treaty. The tax treaties are signed with the aim of restricting tax evasion to liberate non-resident Indians from the problem of double taxation.
Facts of India Tax Treaty:
Most significant India Tax treaty that has gained importance presently is the double taxation treaty. India has signed double taxation treaties on different issues, with a large number of foreign countries like:
- Bulgaria
- Australia
- Canada
- France
- China
- Indonesia
- Ethiopia
- Hungary
- Lebanon
- Italy
- New Zealand
- Germany
- Denmark
- Austria
- Saudi Arabia
- Japan
India Tax Treaty with Bulgaria:
The India tax treaty includes the double taxation treaty of India with Bulgaria on merchant shipping in order to establish maritime relations between India and Bulgaria. The agreement serves to develop regular shipping service between India and Bulgaria. Both the countries are allowed to set up general agencies for the respective shipping companies within the each other's territory. Both countries seek to take required measures to stop ships delays, to hasten the formalities related to customs. The most important aspect of the treaty is that the documents of registration and tonnage have to be mutually recognized. All the other double taxation treaties signed by India with the other foreign countries are included within India tax treaty.
India Tax Treaty with Australia:
India has signed a double taxation treaty with Australia to stop fiscal evasion with regard to income taxes. The agreement is also concerned with resource rent tax for exploration of petroleum resources and with any tax which is similar to the taxes of the federal law of the Australian Commonwealth and even the Indian laws. Both India and Australia are required to inform each other about the modifications in the taxes of each country, only those taxes that are mentioned in the agreement.
India Tax Treaty with Canada:
India has signed a double taxation treaty with Canada to invalidate the problem of double taxation and to foreclose financial evasion with regard to income taxes as well as taxes on capital. The taxes which fall under the purview of the agreement for Canada include all the taxes within the Income Tax Act of Canada. Whereas for India, all the taxes under the Income Tax Act of India and all the surcharges related to income taxes also. The wealth tax is also included within the purview of this agreement.
India Tax Treaty with Ethiopia:
India has signed a double taxation treaty with Ethiopia to nullify the burden of taxes on the incomes of the aircraft operating companies of Ethiopia to pay taxes in India and vice versa. The agreement is also applicable for joint ventures, pool participants in connection with air transport. The amount of interest on funds in relation to the operation of aircraft will be seen as income from the operational activities of the respective aircraft.
India Tax Treaty with France:
India has signed a double taxation treaty with France to remove the burden of double taxation with regard to taxes in income. The agreement is concerned with the profits arising from the industries or even from commercial transactions of an organization of either India or France, is exempted from the payment of taxes in the other country, but there is an exception to this rule. The exception to the said rule is that in case the mentioned company has already a branch or office in the other country then that company is required to pay taxes for that office or branch of the company.
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