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Protocol Amending the Australia-India Tax Treaty

Date:

Thursday, 22 December 2011

Content ID:

2286

Abstract:

The Governments of Australia and India have signed a Protocol amending the Agreement between the Government of Australia and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, which was signed in 1991. The Amending Protocol was signed in New Delhi on 16 December 2011.

Under the updated arrangements:

  • cross-border services will be taxable in the country of source where those services are performed in that other country for more than 183 days in 12 months;
  • source country taxation will apply to profits derived from natural resource exploration or exploitation activities – where those activities are undertaken for more than 90 days in 12 months;
  • source country taxation will apply to profits derived from the operation of substantial equipment - where such operation continues for more than 183 days in 12 months;
  • only the profits attributable to an enterprise’s permanent establishment (branch) in Australia or India may be taxed in that country.  This will remove the ‘force of attraction’ rule in the existing treaty which allows for the taxation of indirect profits connected with a permanent establishment;
  • a new ‘non-discrimination’ article will protect nationals and businesses of one country from tax discrimination in the other country;
  • the ‘exchange of information’ article has been updated to the current international standard and will also allow the revenue authorities of Australia and India to exchange taxpayer information on a wider range of taxes;
  • a new ‘assistance in the collection of taxes’ article will allow the revenue authorities of Australia and India to assist each other in the collection of outstanding tax debts.

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Protocol Amending the Australia-India Tax Treaty  291.33kb

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Protocol Amending the Australia-India Tax Treaty  92.02kb

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Australian Tax Treaties - 28/02/2012

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