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India and Norway today signed a new double taxation avoidance agreement (DTAA) that would, among other things, pave the way for exchange of banking-related information between the two countries for tax administration purposes.
The DTAA was signed by the Finance Minister, Mr Pranab Mukherjee, and the Norwegian Minister of Research and Higher Education, Ms Tora Aasland, here on Wednesday. The new pact will, upon entering into force, replace the existing double taxation avoidance convention (DTAC) signed between the two countries on December 31, 1986.
Lower tax rate
The new DTAA provides for lesser rate of taxation of dividend and interest in the source country. The new rate would be 10 per cent as against 15 per cent or 25 per cent in the existing DTAC.
It also has an article on exchange of information that specifically provides for exchange of banking information and information without domestic interest. These are missing in the DTAC.
Speaking on the occasion, Mr Mukherjee said it was a matter of happiness that the two countries have signed, after a span of 25 years, the revised agreement for the avoidance of double taxation and prevention of fiscal evasion. He hoped that this would make for more transparency and openness in both taxation and fiscal matters.
Ms Aasland said India and Norway had good relations not only in the field of financial matters but also with regard to climate change, water resources and research, among others.
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