The India-Canada Tax Treaty needs to be re-evaluated and modernised so as to boost trade and investment between the two countries, according to an eminent tax expert.
"There is an urgent need to reduce or eliminate withholding taxes on interest on debt; equal and fair treatment for foreign investors similar to domestic companies; and a mandatory binding arbitration provision which will apply in cases where the competent authorities have not resolved certain issues within an agreed period," Prof Vern Krishna, an eminent tax expert, has revealed in his book titled 'Canada India Tax Treaty.'
When the treaty was negotiated several decades back, and even renegotiated in 1996, he said there was a minimum trade between the two countries, and India was a developing country.
"But the situation has now changed. There is not only increase in trade and investment, but India itself is changing, and is emerging as a developed country, and in a very short time it would be a developed country," Prof Krishna said.
He said: "The economic emergence of India holds importance for Canada and its business community. Since India commenced its significant reform process in 1991, the country has moved from a closed economic approach to one which is increasing open and engaged."
Yet, there were a number of trade and investment barriers that must be resolved by mutual understanding and cooperation on a priority basis, Prof Krishna who teaches law at the University of Ottawa opined.