India–France tweak tax treaty to align with global norms
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New Delhi: India and France have amended the double taxation avoidance agreement which will provide for taxation of capital gains on the basis of residency of the company and deleted the Most-Favoured-Nation (MFN) clause, bringing in certainty in taxation.
The amending protocol also modifies the taxation of income from dividends by replacing a single rate of 10 per cent with a split rate of 5 per cent for those holding at least 10 per cent of capital and 15 per cent for all other cases.
It also modifies the definition of ‘Fees for Technical Services’ by aligning it with the definition in the India-US Double Taxation Avoidance Agreement, and expands the scope of ‘Permanent Establishment’ by adding Service PE.
The protocol amending the India-France Double Taxation Avoidance Convention (DTAC) was signed during the recent visit of French President Emmanuel Macron to India. It was signed by Ravi Agrawal, Chairperson, Central Board of Direct Taxes (CBDT), and Thierry Mathou, Ambassador of France to India.
