Cabinet nod to amend tax pacts with Israel, Vietnam

Tribune News Service

New Delhi, October 7

As part of the efforts to enter into tax evasion agreements with countries, the Cabinet today approved protocols amending tax agreements with Israel and Vietnam to include effective sharing of bank information, a move aimed at dealing with black money.

The Union Cabinet approved the protocol amending the convention and the protocol between India and Israel, for avoidance of double taxation and for prevention of fiscal evasion with respect to taxes on income and on capital.

The protocol provides for internationally accepted standards for exchange of information on tax matters, including bank information and information without domestic tax interest. It is provided that the information received from Israel in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the Competent Authority of Israel and vice-versa.

The protocol provides for “Limitation of Benefits” Article as an anti-abuse provision aimed at preventing misuse of the Convention. The provisions of this Article enable use of the provisions of domestic law and measures concerning tax avoidance or evasion in the event of misuse of the Convention.

The existing Double Taxation Avoidance Convention (DTAC) between India and Israel was signed in 1996. Both countries agreed to update Article 27 on the “Exchange of Information” in India-Israel DTAC to meet internationally accepted standards. The Cabinet approved the protocol amending the agreement between India and Vietnam for the avoidance of double taxation and for prevention of fiscal evasion.