Amended Indo-Japan tax treaty kicks in

A protocol amending the Double Taxation Avoidance Convention between India and Japan has come into force that aims to promote transparency and co-operation between the two countries, the finance ministry said today.
The pact for avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, was signed in December 2015 and entered into force on October 29 on completion of procedural requirements.
Prime Minister Narendra Modi will travel to Japan tomorrow on a three-day visit, which is expected to see the signing of civil nuclear deal between the two countries, besides discussions on ways to step up cooperation in the areas like economy and security.

Modi will be holding the annual summit meeting with Japanese Prime Minister Shinzo Abe and have an audience with the Emperor of Japan.
The amended protocol, the ministry said, provides for internationally accepted standards for effective exchange of information on tax matters.
"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," he said.

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.

It 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.
The existing DTAC was earlier signed in March 1989 and notified a year later. The DTAC was subsequently amended in February 2006.