13 February, 2020
2 Min Read
Syllabus subtopic: India and its Neighborhood- Relations.
Prelims and Mains focus: about the move and its significance; about DTAA; BEPS; OECD
News: The Union Cabinet, chaired by PM Modi approved signing and ratification of the protocol amending the agreement between India and Sri Lanka for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
The existing DTAA between India and Sri Lanka was signed on January 22, 2013 and came into force on October 22, 2013.
Why was the amendment required?
Benefits of the move
The amendment of the preamble text and inclusion of Principal Purpose Test (PPT), a general anti-abuse provision in the Double Taxation Avoidance Agreement (DTAA) will result in curbing tax planning strategies which exploit gaps and mismatches in tax rules.
Source: The Hindu
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