New Delhi, July 7
A five-point agenda has been evolved by the Indo-American Chamber of Commerce (IACC) for commercial interaction with the US Administration during the Prime Minister's forthcoming visit to the US.
The agenda addresses issues such as the revision of the Double Taxation Avoidance Treaty, signing of the Totalisation Agreement for avoidance of double taxation of Social Security Tax and the Framework Treaty for free trade in the services sector.
Regarding the Double Taxation Avoidance Treaty, the chamber observes that the lack of clarity on issues such as tax rates on royalties, interest payment and e-commerce tax and the prevalence of a high tax rate on royalties have acted as a dampener in investment and trade initiatives between the two countries.
The chamber has pointed out that Indian IT professionals work on H1B visas in the US for 4-5 years and pay the Social Security Tax but do not get any benefits out of the Social Security System because under the present regulations in the US, benefits out of the system accrue only if the tax has been paid by the individual for 10 or more years.
After the signing of the Totalisation Agreement, such professionals will be exempt from paying the tax in the US.
The chamber also emphasises on the need for investment in India by US companies in sectors such as energy, infrastructure, ITES, research and development, technology development and food processing.