Amendments to the India-Australia DTAA

Despite the fierce cricket rivalry, the amendments will encourage cooperation between the two countries Source: www.topnews.in

India and Australia have signed a new protocol amending their double taxation avoidance agreement (DTAA) which makes a number of changes that will benefit multinationals operating in both countries.

The removal of the force of attraction rule and the provision of a threshold for permanent establishment are two highlights.

Removal of force of attraction rule

This amendment was somewhat surprising given the Indian government's reputation as an aggressive tax collector and is seen as a positive thing for businesses.

Amit Singhania, of Amarchand & Mangaldas, said: "This rule allows for taxation of indirect profits connected with a permanent establishment...