Protocol amending the Convention between India, UK and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect of Taxes on Income and Capital Gains (DTAC)
November, 02nd 2012
PRESS INFORMATION BUREAU
GOVERNMENT OF INDIA*****
PROTOCOL AMENDING THE CONVENTION BETWEEN INDIA, UK AND THE
NORTHERN IRELAND SIGNED FOR THE AVOIDANCE OF DOUBLE
TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO
TAXES ON INCOME AND CAPITAL GAINS
New Delhi, 1st , November, 2012
10 Kartik, 1934 (SAKA)
India and UK signed a Protocol amending the Convention between the Government of
the Republic of India and the Government of the United Kingdom of Great Britain and
Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with Respect of Taxes on Income and Capital Gains (DTAC). This Protocol amends the
earlier Convention that was assigned in New Delhi on 25th January, 1993. The Protocol was
signed on 30th October 2012 in London by Dr Jaimini Bhagwati, High Commissioner of India
to the UK on behalf of the Government of India and Mr David Gauke MP, Exchequer
Secretary to the Treasury on behalf of the Government of UK.
The Protocol streamlines the provisions relating to partnership and taxation of
dividends in both the countries. Now, benefits of the Convention would also be available to
partners of the UK partnerships to the extent income of UK partnership are taxed in their
hands. Further, the withholding taxes on the dividends would be 10% or 15% and would be
equally applicable in UK and in India.
The Protocol incorporates in the Convention provisions for effective exchange of
information between tax authorities of the two countries in line with latest international
standards including exchange of banking information and supplying of information
irrespective of domestic interest. It now also provides for sharing of information to other
agencies with the consent of the supplying state.
There would now be a new article in the Convention on assistance in collection of
taxes. This article also includes provision for taking measures of conservancy. The Protocol
also incorporates into the Convention anti-abuse (limitation of benefits) provisions to ensure
that the benefits of the Convention are not misused. Both the countries would further enter
into MOUs to expedite exchange of information and assistance in collection of taxes.
The Convention, as amended by this Protocol, will provide tax stability to the
residents of India and U.K. and will facilitate mutual economic cooperation between the two
countries. It will also stimulate the flow of investment, technology and services between
India and U.K.