CBDT Notifies Revised DTAA (Protocal) between India & Japan applicable w.e.f. 29 Oct. 2016
Existing Double Taxation Avoidance Convention (DTAC) between India and Japan was signed on 7 March 1989 and was notified on 1 March 1990, which was subsequently amended on 24th Feb. 2006. A Protocol amending the said DTAC for the Avoidance of Double Taxation and the Prevention of Fiscal evasion with respect to taxes on income which was signed on 11 Dec. 2015 has entered into force on 29 Oct. 2016 on completion of procedural requirements by both countries.
The Protocol amending the DTAC aims to promote transparency and cooperation between the two countries. The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It is further provided that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorization of the Competent Authority of Japan and vice versa.
The Protocol provides for exemption of interest income from taxation in the source country with respect to debt-claims insured by the Government/Government owned financial institutions.
The Protocol inserts a new article on assistance in collection of taxes. India and Japan shall now lend assistance to each other in the collection of revenue claims.
Accordingly, the CBDT has notified the amended Protocal/ Convention between the Government of India and Japan for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income, applicable w.e.f. 29 Oct. 2016, as under:
CBDT Notification No. 102/2016 dt. 28 Oct. 2016 F. No. 506/69/81-FTD-I
S.O. 3346(E).— Whereas the annexed Protocol amending the Convention between the Government of the Republic of India and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income [hereinafter referred to as said “Protocol”] shall enter into force on the 29th day of October, 2016 in accordance with paragraph 1 of Article 4 of the said Protocol;
Now, therefore, in exercise of the powers conferred by Section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of said Protocol amending the Convention between the Government of the Republic of India and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income shall be given effect to in the Union of India with effect from the 29th day of October, 2016.
AMENDING THE CONVENTION
BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND
THE GOVERNMENT OF JAPAN
FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE
PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME