India-Chile double taxation avoidance treaty approved
The Union Cabinet on Wednesday gave a green signal to the Double Taxation Avoidance Agreement (DTAA) between India and Chile. According to this treaty, tax-payers in these countries can avoid being taxed twice for the same income. It will enforce minimum standards and other recommendations of G-20 OECD Base Erosion Profit Shifting (BEPS) Project.
“Clear allocation of taxing rights between contracting states through the agreement will provide tax certainty to investors and businesses of both countries while augmenting the flow of investment through fixing of tax rates in source state on interest, royalties and fees for technical services,” the government stated.
A DTAA is applicable in cases where a tax-payer resides in one country and earns income in another.