On 30 December 2016, officials from India and Singapore concluded negotiations with the signing of a new protocol to the 1994 income tax treaty between the two countries. The protocol is the third to amend the treaty. The main revision to the treaty is the removal of the capital gains tax exemption, which was contingent upon the exemption under the 1982 India-Mauritius tax treaty remaining in effect. The India-Mauritius treaty was amended via a protocol signed in May 2016, which included the removal of the exemption (previous coverage).
With the new protocol, the taxation of capital gains will be transitioned as follows:
The protocol also includes that the benefits of the transition (exemption / 50% taxation) will not apply if the alienator's affairs were arranged with the primary purpose to take advantage of the benefits.
In addition to the capital gains revisions, the new Protocol also:
The protocol will enter into force after the ratification instruments are exchanged. However, if it is not in force by 31 March 2017, it will automatically enter into force on 1 April 2017.
We’re here to answer any questions you have about the Orbitax products and services.
We’re committed to providing high value, low cost tax research and management solutions.
Our Twitter account is where you can find latest information, news updates, offers and lots more.