India and Australia today signed a protocol that would pave the way for more effective exchange of information on tax matters including bank information.
The latest amendments to the double taxation avoidance agreement (DTAA), would facilitate higher degree of mutual cooperation between the two countries.
Both countries have now agreed that they would lend assistance to each other in the collection of revenue claims. The assets or monies kept in one country can be recovered by the other country for the purposes of recovery of taxes by following certain conditions and procedures.
The protocol was signed by Mr S.S. Palanimanickam, Minister of State for Finance, and Mr Bill Shorten, Minister for Employment and Workplace Relations and Minister for Financial Services and Superannuation, Government of Australia here today.
The original India-Australia DTAA was signed way back in 1991. The protocol signed today also provides that information received from Australia in respect of a Indian resident can be shared with other law enforcement agencies with authorisation of the competent authority of Australia and vice-versa. The Protocol was finalised in February 2011.
The protocol also provides that nationals of one country shall not be discriminated against the nationals of the other country in the same circumstances in line with international practices. The concept of non-discrimination was not there in the existing treaty.
Also, the threshold limits to avail the exemption for service, exploration and equipment permanent establishments and taxation thereof have been rationalised to encourage cross border movement of capital and services between the two countries.