9/1/2017 222 India and the world | Indo-West Asia | View Recent Current Affairs
- The DTAC between both countries was earlier signed in December 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.
- This Protocol Provides internationally accepted standards for effective exchange of information on tax matters. Further, allows tax authorities to share information with other law enforcement agencies with prior authorisation. L
- Imitation of Benefits Article has been inserted to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax evasion or avoidance. Specific provisions to facilitate relieving of economic double taxation in transfer pricing cases also have been inserted.
- It is a taxpayer friendly measure and is in line with India’s commitment under Base Erosion and Profit Shifting (BEPS) Action Plan to meet standards of Mutual Agreement Procedure (MAP) access in transfer pricing cases.
- Service PE (PE provisions) provisions also have been inserted with a threshold and the profits to be attributed to PE will be determined on the basis of apportionment of total profits of the enterprise.
- It replaces existing Article on Assistance in Collection of Taxes with a new Article in order to align it with international standards.
Analysis(Indo – Kazakhstan relations):
- Diplomatic relations with independent Kazakhstan were established in February 1992 during the first visit of President Nazarbayev to India. This was followed by the visit of Prime Minister of India Shri Narsimha Rao in 1993 which gave impetus to bilateral relations.
- The India-Kazakhstan Inter-Governmental Commission (IGC) established in 1993 has been the main institutional mechanism in developing bilateral trade, economic, scientific, technological, industrial and cultural cooperation. The Ministry of Petroleum and Natural Gas on the Indian side and Ministry of Energy on the Kazakh side are the nodal agencies with respective Ministers as the Co-Chairs.
- India has been a consistent supporter of Kazakhstan’s initiative to convene Conference on Interaction and Confidence-Building Measures in Asia (CICA) and is actively participating in the process.
- Kazakhstan is supportive of India’s permanent membership to UNSC. Kazakhstan had withdrawn its candidature for non- permanent membership of UN SC for the period 2011- 2012 in India’s favour. India supports Kazakhstan’s candidature for non- permanent membership of UNSC for 2017-18.
- Kazakhstan is India largest trading partner in Central Asia. Bilateral trade during 2014- 15 was US$ 952.26 million. The exports from India to Kazakhstan amounted to US$ 250.59 and exports from Kazakhstan to India were US$ 701.67. Major products exported to Kazakhstan are pharmaceuticals and medical products, Tea, telephone equipment, tobacco and construction machinery. Major products imported by India are oil, uranium, asbestos and titanium
- In the cultural sphere, the bilateral relations are deep rooted, vibrant and dynamic. India and Kazakhstan have a natural affinity with each other as both are multiethnic, multi-cultural and multi-religious secular States. The friendly relations with former Soviet Union positively influenced the attitudes of Kazakh people towards Indian culture, which continues to manifest in the popularity of yoga, Indian films, dance and music in Kazakhstan. In last few years, Indian TV serials have also become popular in Kazakhstan.