In what would be India's first multilateral tax treaty, countries under the ambit of the South Asian Association for Regional Cooperation are putting final touches to a SAARC Limited Multilateral Agreement on avoidance of double taxation and mutual administrative assistance in tax matters.
With Indian companies going global and the country becoming a hot investment destination a slew of double taxation avoidance agreements are in the pipeline.
Revenue department officials said 15 such new treaties are under negotiation while another 15 are being rewritten.
India is negotiating DTAA with Latin Amercian countries like Uruguary, Chile and Venezuala. Guyana, Ethiopia, Mozambique, Nigeria and Senegal are some African countries with which a DTAA is being negotiated, officials said adding that DTAAs were also being formalised with Iran, Kuwait and Saudi Arabia.
The treaties in Africa and Latin America would be important from the point of view of petroleum companies looking for equity oil, pharma companies and software developers.
In addition, existing DTAA are being revisited with Tanzania, Kenya, Zambia, Japan, Korea and Egypt.
The limited multilateral treaty in Saarc could be bad news for tax evaders in the Indian sub-continent. Countries like India, Pakistan, Bangaldesh and Sri Lanka would soon be able to exchange information and assistance for settling outstanding revenue claims of individual traders and firms.
Three rounds of meetings have already been held and the next meeting is slated to be held on August 30. 'This is the first limited DTAA for a region. It would encompass four elements pertaining to students, profressors, teachers and research scholars, exchange of information and assistance in collection of taxes,' a finance ministry official said.
Officials said that the limited DTAA would extend tax exemption to students, teachers, professors and research scholars.
"In order to enable exchange of information, the SAARC member countries could agree on the setting up of a nodal agency or a central information desk at the SAARC secretariat in Kathmandu,' an official said.
1st multilateral tax treaty for India
DTAA to avoide double taxation and mutual administrative assistance in tax matters.
15 DTAAs under negotiation
Treaty important for petroleum companies
Tax evaders to be at a loss
- Limited DTAA to extend tax exemption