India and Japan on Friday signed a protocol to amend the Double Taxation Avoidance Convention (DTAC) that would facilitate tax-related information exchange, an official here said.
The existing DTAC was signed between the
two countries in 1989 for avoidance of double taxation and prevention
of fiscal evasion through a protocol.
The protocol signed on Friday gains all
the more importance as it is being signed few hours before the arrival
of Japanese Prime Minister Shinzo Abe in India, the finance ministry
said in a statement.
The protocol will facilitate exchange of
information as per accepted international standards on tax matters,
including bank information and information without domestic tax
interest, the statement said.
There is a further provision in the
protocol for sharing any information received from Japan with
authorisation of the its competent authority, and vice versa, in respect
of an Indian resident with other law enforcement agencies, it added.
The protocol has a provision for both
countries to assist each other in collection of revenue claims, and for
exemption of interest income from taxation in the source country with
respect to debt claims insured by the government or government-owned
financial institutions, the statement said