INDIA'S DOUBLE TAX AVOIDANCE AGREEMENTS WITH OTHER COUNTRIES

Sl. No.

Country DTAA between India and

Effective date in India

Dividend (other than u/s. 115O) (%)

Interest (%)

Tax rate on Royalties (%)

Technical Service Fees(%)

Remarks

1

Australia 194 ITR 241

01.04.92
A.Y.1993-94

15 @

15 @

[See Note 2]

[See Note 1]

2

Austria 56 ITR 17

01.04.62
A.Y. 1963-64

*
+

*
+

*
+

Taxable only in Source country at prevailing rates.

Expenses incurred are deductible from technical service fees.

3

Bangladesh 198 ITR 99

01.04.92 A.Y.1993-94

10 @
15 @

10 @

10 @

As per domestic law

10% tax on dividends if at least 10% of the capital is owned by Company ; in other cases 15%.

4

Belgium 228 ITR 79

01.04.98 A.Y.1999-2000

15 @

10 @
15 @

20 @

20 @

10% tax on interest if loan granted by bank, other cases 15%

5

Brazil 195 ITR 73

01.04.93 A.Y.1994-95

15 @

15 @

25 @
15 @

As per domestic law

Royalties arising from use or right to use trade marks taxable at 25%, in other cases tax rate is 15%

6

Bulgaria 220 ITR 30

01.04.96 A.Y.1997-98

15 @

15 @

15 @
20 @

20%

Royalties relating to Copyrights etc. taxable at 15%, in other cases 20%

7

Canada 229 ITR 44

01.04.98 A.Y.1999-2000

15 @
25 @

15 @

[See Note 2]

15% tax on dividends if atleast 10% of Capital is owned by a Co., in other cases 25%. Under Old Treaty Royalty for agreement signed after 12.12.88 is taxable at 20%. In respect of agreement signed after 26th Oct. 1996, for technical services fees & Royalty rate of tax 10%, due to Indo-German D.T.A.A. However under New Treaty Taxation of Royalty is as per Note 2.

8

China 214 ITR 160

01.04.95 A.Y.1996-97

10 @

10 @

10 @

10 @

 

9

Cyprus
218 ITR 70

01.04.93
A.Y.1994-95

10 @
15 @

10 @

15 @

10 @

10% Tax on dividends if at least 10% of the capital isowned by Company; in other cases 15%. Article 13 deals with Technical Fees, Article 12 deals with
Royalties and Fees for Included Services.

10

Czechoslovak
Socialist Republic
167 ITR 23

01.04.85
A.Y.1986-87

15 @
25 @

15 @

30 @

30 @

15% tax on dividends if at least 25% of the capital is
owned by Company ; in other cases 25%

11

Denmark
180 ITR 1

01.04.90
A.Y.1991-92

15 @
25 @

10+
15+

20 @

20 @

15% tax on dividends if at least 25% of the capital is
owned by Company; in other cases 25%.
Interest is taxable at 10% on loan from bank, in other cases it is taxable at 15%.

12

Finland
152 ITR 57

01.04.84
A.Y.1985-86

15+
25+

15+

30 @

30 @

15% tax on dividends if at least 10% of the capital is
owned by Company; in other cases 25%.

13

French Republic
209 ITR 130

01.04.95
A.Y.1996-97

15 @

10 @
15 @

20 @

20 @

Interest is taxable at 10% on loan from bank or financial institution or from enterprise holding atleast 10% of capital of Interest paying company. 15% in other cases. Since lower tax rate of 10% is prescribed on interest, dividend, royalty and technical service fees, under Indo-German Treaty; the same rate will be applicable as per Protocol w.e.f. 26.10.96

14

Germany (Federal Republic of Germany)
223 ITR 130

01.04.97
A.Y.1998-99

10 @

10 @

10 @

10 @

Treaty has some of the lowest withholding rates. It also effectively lowers from 29.10.96, withholding rates of India's Treaties with other OECD Countries such as France, Netherlands, Norway, Spain etc.

15

Greece
64 ITR 86

01.04.63
A.Y.1964-65

*

*

*

*

* Dividend, interest & royalty income is chargeable as per domestic law in source country only.

16

Hungary
167 ITR 4 &
187 ITR 58

01.04.88
A.Y.1989-90

15 @

15 @

40 @

20 @

15% tax on dividends if at least 10% of the capital is
owned by Company and dividend relates to a new contribution after 1.4.88.

17

Indonesia
171 ITR 27

01.04.88
A.Y.1989-90

10 @
15 @

10 @

15 @

As per domestic law

10% tax on dividends if at least 25% of the capital is
owned by Company; in other cases 15%.

18

Israel
222 ITR 10

1.6.96 / 1.4.94

10 @

10 @

10 @

10 @

For TDS on dividend, interest, royalties & technical service fees effective date is 1.6.96, for taxes on Income & Capital effective date is 1.4.94

19

Italy
220 ITR 3

01.04.96
A.Y.1997-98

15 @
25 @

15+

20 @

20 @

15% tax on dividends if at least 10% of the capital is owned by Company; in other cases 25%.

20

Japan
182 ITR 380

01.04.90
A.Y.1991-92

15 @

10 @
15 @

20 @

20 @

Interest taxable at 10% if beneficial owner is a bank and 15% in all other cases.

21

Kazakstan
228 ITR 162

01.04.98
A.Y.1999-2000

10 @

10 @

10 @

10 @

 

22

Kenya
157 ITR 8

01.04.84
A.Y.1985-86

15 @

15+

20+

As per domestic law

 

23

Korea (South)
165 ITR 191

01.04.86
A.Y.1987-88

15 @
20 @

15 @
10 @

15 @

15 @

15% on dividend if at least 20% of capital is owned by co, other cases 20%. For interest at 10% if recd. by bank or govt, other cases it is 15%.

24

Libya
137 ITR 27

01.04.83
A.Y.1984-85

*
+

*
+

*
+

No separate provision

* Dividend, interest royalty will be taxable as per domestic law of source country.

25

Malaysia
107 ITR 36

01.04.72
A.Y.1973-74

*
+

*
+

*
+

No separate provision

* Taxable as per domestic law applicable. Special treatment provided to dividends paid by Companies resident in both Malaysia and Singapore.

26

Malta
218 ITR 13

01.04.96
A.Y.1997-98

10 @
15 @

10 @

15 @

10 @

10% tax on dividends if at least 25% of the capital is owned by Company ; in other cases 15%. Article 13 deals with Technical Fees, Article 12 deals with Royalties and Fees for Included Services.

27

Mauritius
146 ITR 214

01.04.82
A.Y.1983-84

5 @
15 @

* @

15+

Taxable in country of residence as per domestic law

5% tax on dividends if at least 10% of the capital is owned by Company; in other cases 15%.
* Interest exempt if beneficially owned by Govt. or bank carrying bonafide banking business, in other cases rate as per domestic laws.

28

Mongolia
222 ITR 44

01.04.94
A.Y.1995-96

15 @

15 @

15 @

15 @

 

29

Nepal
175 ITR 33

01.04.89
A.Y.1990-91

10 @
15 @

10 @
15 @

15 @

In country of residence as per domestic law

10% tax on dividends if at least 10% of the capital is owned by Company ; in other cases 15%. Interest taxable @ 10% if recipient is bank carrying on bonafide banking business, otherwise 15%.

30

Netherlands
177 ITR 72

01.04.90
[01.04.87 for Air transport] A.Y.1991-92

15 @

10 @
15 @

20 @

20 @

Interest taxable at 10% in the case of banks or financial institutions carrying on bonafide banking or financing business or enterprise holding more than 10% of Capital of payer company and at 15% in all other cases.

31

New Zealand
166 ITR 90
225 ITR 15

01.04.87
A.Y.1988-89

20 @

15 @

30 @

30 @

Protocol restricting treaty benefits to Indian or New Zealand residents. 225 ITR 15.

32

Norway
169 ITR 15

01.04.87
A.Y.1988-89

15 @
25 @

15 @

+
rate not prescribed

10+

15% tax on dividend if at least 25% of the capital is owned by company and the dividends are attributable to new contribution; in other cases, dividend will be taxable at 25%. Technical services fees taxable at 10%, as per lower rate specified in Indo-German DTAA w.e.f. 26.10.1996.

33

Oman (Sultanate of)
228 ITR 21

01.04.98
A.Y.1998-99

10 @
12.5 @

10 @

15 @

15 @

10% tax on dividends if beneficial owner is company owning atleast 10% of capital in payer company. 12.5% in all other cases.

34

Philippines
219 ITR 60

01.04.95
A.Y.1996-97

15 @
20 @

10 @
15 @

15 @

In country of residence

15% tax on dividends if at least 10% of the capital is owned by Company; in other cases 20%. Interest at 10% in hands of financial institutions,Insurance Company and also on public issues of bond, debentures, etc., and at 15% in all other cases.

35

Poland
182 ITR 147

01.04.90
A.Y.1991-92

15 @
*

15 @

22.5 @

22.5 @

* Dividend should relate to new contribution after
1.4.90.

36

Romania
171 ITR 170

01.04.88
A.Y.1989-90

15 @
20 @

15 @

22.5 @

22.5 @

15% tax on dividend if at least 25% of capital is owned by company, 20% in other cases.

37

Russian Federation
179 ITR 89

01.04.90
A.Y.1991-92

15 @

15 @

15 @
20 @

20 @

Royalty relating to copyrights literacy artistic or scientific work other than cinematographic film, tapes etc. at 15%. Other royalty at 20%.

38

Singapore
209 ITR 1

01.04.94
A.Y.1995-96

10 @
15 @

10 @
15 @

15 @
10 @

15 @
10 @

10% tax on dividend if at least 25% of capital is owned by co. In other cases 15%. Interest at 10% if recipient is bank, insurance co. or similar financial institution. In other cases 15%. Royalty payment for use of equipment and ancillary technical services at 10%, in other cases 15%.

39

South Africa
98 TAXMAN 4

01.04.98
A.Y.1999-2000

10 @

10 @

10 @

10 @

 

40

Spain
214 ITR 197

01.04.96
A.Y.1997-98

15 @

15 @

10 @
20 @

20 @

Royalty payment for use of or right to use equipment is taxable at 10%, in other cases it is 20%.

41

Sri Lanka
143 ITR 7

01.04.81
A.Y.1982-83

15+

10 @

10 @

In country of residence as per domestic law

 

42

Sweden
229 ITR 11

01.04.98
A.Y.1999-2000

10 @

10 @

10 @

10 @

 

43

Swiss Confederation
214 ITR 223

01.04.95
A.Y.1996-97

15 @

15 @
10 @

[See Note 2]

Interest is taxable at 10% if recipient is bank, or enterprise holding 20% of capital, otherwise it is 15%

44

Syria
155 ITR 93

01.04.83
(1.4.75 for operation of aircraft) A.Y.1984-85

*

7.5+

10+

Taxable in country of residence as per domestic law

* Dividend is taxable only in country of residence as per domestic law.

45

Tanzania
132 ITR 35

01.01.82
A.Y.1983-84

10+
15+

12.5+

20+

Taxable in country of resid- ence as per domestic law

Dividends taxable at 10% if the recipient is a company which holds at least 10% of the shares during atleast 6 months preceding the date of payment of dividend; tax on dividend at 15% in
all other cases.

46

Thailand
161 ITR 82

01.01.87
A.Y.1988-89

15 @
20 @
*

10+
25+

15+

As per domestic law of both countries

* Dividend taxable at 15% if payer is industrial co. and payee co. is holding at least 10% of voting shares in it. Taxable at 20% if payee is industrial co. or recipient co. is beneficial owner holding atleast 25% of voting shares. In other cases as per domestic law. Interest taxable at 10% if recipient is financial institution including insurance co., otherwise at 25%.

47

Turkmenistan
228 ITR 44

01.04.98
A.Y.1999-2000

10 @

10 @

10 @

10 @

 

48

Turkey
224 ITR 145

01.04.94
(notified on 03.02.97)
A.Y.1995-96.

15 @

10 @
15 @

15 @

15 @

Interest is taxable at 10% if recipient is a bank or a financial institution, in other cases 15%.

49

United Arab Emirates
205 ITR 49

01.04.94
A.Y.1995-96

5 @
15 @

5 @
12.5 @

10 @

In country of residence as per domestic law

Dividend taxable at 5% if the beneficial owner is a Co. which holds at least 10% of the shares and at 15% in all other cases. Tax on interest at 5% in cases of banks, etc., and at 12.5% in all other cases.

50

United Arab Republic
74 ITR 11

01.01.70
A.Y.1971-72
(01.01.61 operation of aircraft)

*

*

Taxable
only in source country

As per domestic Laws of both countries

* For rate of tax & basis of taxation refer to the DTAA Provision.

51

United Kingdom
206 ITR 235

01.04.94
A.Y.1995-96

15 @

15 @
10 @

[See Note 2]

Interest taxable at 10% if beneficial owner is bank which is resident, in other case at 15%

52

United States of America
187 ITR 102

01.04.91
A.Y.1992-93

15 @
25 @

10 @
15 @

[See Note 2]

15% tax on dividends if at least 10% of the capital is owned by Co; in other cases 25%. Interest taxable at 10% if recipient is bonafide bank or financial institution, in other cases 15%. Technical Services termed as Included Services. Treaty has Limitation of Benefits and P.E. Tax Articles. Protocol is very important.

53

Uzbekistan
223 ITR 60

01.04.93
A.Y.1994-95

15 @

*

15 @

15 @

* Interest received from transaction approved by source country's govt. will be exempt. In other cases normal provision of domestic tax will apply.

54

Vietnam (Socialist Republic of Vietnam) 214 ITR 137

01.04.96
A.Y.1997-98

10 @

10 @

10 @

10 @

 

55

Zambia
146 ITR 233

A.Y.1979-80

5+
15+

10+

10+

As per domestic law of both countries

Dividend taxable at 5% if the recipient is a Co. which holds at least 25% of the shares during at least 6 months before the date of payment and at 15% in all other cases.

Notes :

 

1

In most cases the aforesaid rates of tax are on gross income but in some cases, tax is levied on the net income and, hence, each article of the respective agreement/s must be carefully analysed and applied.

2

In the Country of Source, Royalties and Fees for Technical Services are taxed at following rates :

  1. 10% for Equipment Rental and for Services ancillary or subsidary thereto.
  2. for other Cases.
    1. during 1st five years of Agreement
      - 15% if Govt. or Specified Organisation is payer
      - 20% for other payers
    2. subsequent years, 15% in all cases
      Income of Government/Govt. Organisations exempt from Taxation in Country of Source.

3

Pages referred to in citation are statute page nos.

@

- Beneficial Ownership required

+

- Beneficial Ownership may not be required

For agreement made after 31st May, 1997, the rate of tax on royalty or fees for technical services receivable by a foreign company is reduced from 30% to 20% by Finance Act 1997.