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India-Netherlands Double Taxation Avoidance Agreement (DTAA)

The Double Taxation Avoidance Agreement (DTAA) signed between the government of the Republic of India and the government of the Kingdom of the Netherlands aims to prevent double taxation and fiscal evasion concerning taxes on income and capital. This agreement came into force on January 21, 1989, and plays a crucial role in regulating tax matters between these two nations.

Applicability

The India-Netherlands DTAA applies to individuals or entities who are residents of one or both of the contracting states. It covers several taxes:

In the Netherlands:

  1. Income tax
  2. Wages tax
  3. Company tax
  4. Dividend tax
  5. Capital tax

In India:

  1. Income tax, including any surcharge
  2. Surtax
  3. Wealth tax

Key Highlights

Here are some key highlights and provisions of the India-Netherlands DTAA:

  1. Taxation of Income from Immovable Property: A resident of one state who receives income from immovable property located in the other state may be subject to taxation in the latter state.
  2. Profits from Operation of Airplanes: Only the state where the place of effective management of a business is located may tax profits from the operation of airplanes engaged in international traffic.
  3. Taxation of Dividends: Dividends paid by a company resident in one state to a resident of the other state may be taxed in the other state at a rate of 10%.
  4. Withholding Tax on Interests, Dividends, Royalties, and Fees: The recipient, being the beneficial owner of interests, dividends, royalties, and fees for technical services, shall be subject to a withholding tax at a rate of 10%.
  5. Exemption for Students and Business Apprentices: Any student or business apprentice who is or was a resident of one state before travelling to another state for educational or training purposes is exempt from paying taxes in that other state.

Inference

The India-Netherlands DTAA is a vital agreement that aims to prevent double taxation and fiscal evasion, especially concerning taxes on income and capital. It has played a significant role in promoting bilateral cooperation and strengthening the relations between the two countries.

This agreement not only helps in preventing double taxation but also encourages individual business initiatives and boosts economic prosperity in both contracting states. It seeks to extend and deepen economic ties, particularly in relation to investments made by investors from one state in the territory of the other state.

If you require more detailed information, legal advice, or assistance regarding the India-Netherlands Double Taxation Avoidance Agreement or other legal matters, please do not hesitate to contact Chandrawat & Partners. Our team of legal experts specializes in international tax agreements and is dedicated to providing tailored legal support to address your specific needs.

We are committed to delivering high-quality legal services, ensuring your satisfaction, and providing peace of mind. For inquiries or discussions related to your legal concerns, please reach out to us. We are here to serve your legal needs with professionalism and diligence.

To know more about DTAA relations between India and Netherlands, please download our Guide.

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