Financial Daily from THE HINDU group of publications
Wednesday, Nov 23, 2005


Group Sites

Industry & Economy - Foreign Trade

`Tax treaty talks: India to follow UN model'

K. R. Srivats

The other model on which tax treaties are worked out is the one advocated by the Organisation for Economic Cooperation and Development.

New Delhi , Nov. 22

INDIA will continue to go mainly with the UN model in its tax treaty negotiations with other countries, since it continues to be a capital importing country, a top Finance Ministry official has indicated.

The other model on which tax treaties are worked out is the one advocated by the Organisation for Economic Cooperation and Development (OECD).

The OECD has stepped up efforts to engage India increasingly in its deliberations and know the latter's position in a number of areas.

"India has not changed its stance and we still follow the UN model," Mr D.P. Sengupta, Joint Secretary (Foreign Tax and Tax Research), Central Board of Direct Taxes (CBDT), said here recently at an international tax conference when asked whether the country has changed its stance and decided to move away from the UN model to the OECD model.

He said that India is still a capital importing country and the model that is followed would have to take into account the interests of the capital importing countries.

The UN model is considered to be better suited for capital importing and developing countries.

Apart from the fact that India is not a member of the OECD, the Finance Ministry official pointed out that there are problems in stating the country's positions in OECD commentaries.

India does not agree with many of the the organisation's provisions — particularly those relating to the Permanent Establishment (PE), royalty, fees for technical services.

Mr Sengupta stressed the need for not only maintaining, but also widening the tax base, and said that this was necessary if one were to see further lowering of tax rates.

Informed sources said that the differences between the two models are limited in number but significant.

Major differences can be found in the areas of permanent establishments, business profits, dividends, royalties, capital gains and other income.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

More Stories on : Foreign Trade

Stories in this Section
Cool seawaters spare Tamil Nadu the blushes

`Cement cos margins under pressure'
`Tax treaty talks: India to follow UN model'
ILO moots work place norms for IT, BPO sectors
`HIV prevalence rising in India'
Workshop on voice disorders in Thiruvananthapuram
Pampa Action Plan going off course
Greater Visakha comes into existence
`World oil prices likely to settle at $64 up to 2010'
Crude output dips in Oct, natural gas production rises
Oil cos may release new LPG connections from December
LPG cavern trial run at Visakhapatnam by next year-end
`Dabhol project hinges on Central, State support'
SERC issues draft efficiency norms
AP: CM's assurance to military personnel on VAT issue
2 check posts abolished in Dakshina Kannada
Central fund for AP drinking water scheme
Crowding broadcast space to lower margins
BBC seeks nod to pick up 20 pc in Radio Mid-Day
VSP, Gitam Engg College to sign MoU
`Zero factor important to be world beater'
Magma pact with Anna varsity
Global MBA programme
Free engg entrance diagnostic test
Processed foods: `Adherence to safety norms vital'
Stem cell research centre to come up at CMC, Vellore
Private hosiery park planned in Tirupur
New duty drawback rate irks TEA
Date extended for IFFK passes
Japanese cos plan to invest $1.5 b in next three years
`Japanese FDI in manufacturing to boost bilateral trade'
Nabard sanctions Rs 359.62 crore to AP
Global, domestic players to take part in ACMEE
FAPCCI seminar on tech transfer at Vizag
Entrepreneurship programme at Hyderabad
SCCL contributes Rs 1 cr to AP CM's Relief Fund

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line