DTAA agreement between Kuwait and Republic of India - 277/2007 - Income Tax

Double taxation avoidance: treaty allocates taxing rights and limits source withholding on dividends, interest and royalties.

The Agreement allocates taxing rights by category of income, designating permanent establishment as the principal nexus for business profits and providing arm's length attribution rules; immovable property income is taxable where located; shipping and air transport profits are taxable only in the enterprise's residence State. Dividends, interest and royalties may be taxed in the source State but withholding is limited where the recipient is the beneficial owner and special rules exclude amounts effectively connected with a PE or fixed base. The treaty also prescribes elimination of double taxation by credit, non discrimination, mutual agreement and exchange of information, and an anti abuse limitation of benefits clause.