Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 13th April, 2018

PRESS RELEASE

CBDT notifies the Protocol amending the Double Taxation Avoidance Convention (DTAC) between India and Kazakhstan

A Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) between India and Kazakhstan, earlier signed on 9th December, 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income, was signed on 06.01.2017. The said Protocol has entered into force on 12.03.2018 and was notified in Official Gazette on 12.04.2018.

Salient features of the Protocol are as under:

(i) The Protocol provides internationally accepted standards for effective exchange of information on tax matters. Further, the information received from Kazakhstan for tax purposes can be shared with other law enforcement agencies with the authorisation of the competent authority of Kazakhstan and vice versa.

(ii) The Protocol inserts a Limitation of Benefits Article, to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax avoidance or evasion.

(iii) The Protocol inserts specific provisions to facilitate relieving of economic double taxation in transfer pricing cases. This is a taxpayer friendly measure and is in line with India’s commitment under Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases.

(iv) The Protocol replaces the existing Article on Assistance in Collection of Taxes with a new Article to align it with international standards.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

Exchange of information standards strengthened; protocol adds limitation of benefits and transfer pricing MAP access protections for taxpayers. The Protocol amends the DTAC to adopt exchange of information standards permitting authorised sharing with law enforcement, replaces the assistance in collection article to align with international practice, inserts a Limitation of Benefits provision with a main purpose test to prevent treaty misuse and allow domestic anti-avoidance measures, and provides MAP access and specific measures to relieve economic double taxation in transfer pricing cases consistent with BEPS minimum standards.