India and Nepal signed Double Taxation Avoidance Agreement (DTAA)

From Shirish B Pradhan and Chandra Shekhar Kathmandu, Nov 27 (PTI) India and Nepal today signed a revised Double Taxation Avoidance Agreement (DTAA), which will facilitate exchange of banking and tax information and sharing it with law enforcement agencies. "The revised DTAA provides for internationally accepted standards, including sharing of bank information," India's Finance Minister Pranab Mukherjee said in a joint press conference with Nepalese conterpart Barshaman Pun. He said as per the DTAA, the two countries will also share information on taxation which, however, will not hamper their respective domestic interests. "Further, the information received can be shared with other law enforcement agencies with the consent of the information supplying country," he added. The revised tax treaty will replace an earlier agreement signed between the two countries in 1987. The earlier agreement with Nepal did not provide for the sharing of banking information. "The revised DTAA will provide stability to the residents of India and Nepal and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Nepal," Mukherjee said. The tax treaties, he said, were being modified in line with agreement reached at the G-20 meetings of global leaders. The revised DTAA would also help in assessment of taxes and one-time payment in the source or destination country whenever necessary. Further, the threshold withholding tax rates on dividends, interest, have been rationalised as per international taxation requirements. India and Nepal were supposed to sign the revised DTAA during Nepalese Prime Minister Baburam Bhattarai India visit in October but it was postponed due to some technical reasons.