Protocol Amending Indo-Australia Treaty Notified

The Protocol amending the Tax Treaty between India and Australia (Treaty), which was signed on 16 December 2011, has now been notified.

The Protocol has removed the 'force of attraction' principle in relation to taxation of profits attributable to a permanent establishment (PE). The threshold as regards duration of services and activities carried out by a foreign enterprise constituting its PE has also been prescribed / revised, narrowing down the wide purview of the definition in this regard. Further, the Protocol has widened the scope of the Article relating to 'Exchange of Information' and has inserted new Articles with respect to 'Non-Discrimination' and 'Assistance in the collection of Taxes'. This Khaitan alert summarizes the changes in the Treaty.

Read More