India and China Amend Tax Treaty for Greater Flow of Information : 28-11-2018

India and China have amended their bilateral tax treaty to enable greater flow of information and help prevent tax evasion.
“The Government of India and the People’s Republic of China have signed a protocol on November 26, 2018, to amend the Double Taxation Avoidance Agreement (DTAA) for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income,” a statement from the Central Board of Direct Taxes said Monday.
This amendment brings existing provisions for exchange of information on par with latest global standards, the statement said.
The protocol incorporates changes required to implement treaty-related minimum standards under the action reports of Base Erosion & Profit Shifting (BEPS) Project, a global agreement to curb tax evasion.
Tax experts say the changes would make the exchange meaningful. “This protocol strengthens the ‘Exchange of Information’ clause, bringing it to international standards, to enable a more meaningful exchange of information,” said Rakesh Nangia, managing partner, Nangia Advisors LLP. India and China inked the DTAA in 1994.
China had included 102 treaties in its list of ‘Covered Tax Agreement’ but not India while penning the ‘Multilateral Instrument’, which meant the minimum standards suggested by BEPS report wouldn’t have amended the India-China DTAA even after the global treaty.
In order to bring the changes suggested by BEPS, it was necessary for India & China to sign a protocol and bring the changes bilaterally.
Source : Economic Times