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India-Greece Double Taxation Avoidance Agreement (DTAA)
The India-Greece Double Taxation Avoidance Agreement (DTAA) is a significant bilateral agreement between the governments of India and Greece. It aims to prevent double taxation concerning taxes on income and capital. This DTAA came into force on 17 March 1967 after its ratification in 1965.
Applicability
The DTAA is applicable to specific taxes in the contracting states:
In India:
- Income tax.
- Super tax.
- The surcharge imposed under the Income-tax Act, 1961.
In Greece:
- Tax on physical persons.
- Income tax on legal entities.
- Special tax levied in Greece concerning freight earned by shipping enterprises from the carriage of passengers, livestock, or goods.
Key Highlights
Here are key highlights of the India-Greece DTAA:
- Permanent Establishment: No tax shall be levied on the commercial profits earned by a permanent establishment of an enterprise in the other territory.
- Withholding Tax Rates: The DTAA specifies withholding tax rates for interest, dividends, and royalties at 20%, 20%, and 10%, respectively. Dividends paid by a company to residents of another country are subject to taxation by the country making the payment.
- Taxation of Immovable Property and Capital Gains: Taxation of income from immovable property and capital gains should occur in the country where such property is located or where the capital gain arises. Remuneration for services paid out of public funds in one country but not to its citizens shall not be taxed in the other country.
- Taxation of Pensions and Annuities: Pensions or annuities derived by a resident of one territory from sources in the other territory are taxed only in the territory where they arise.
- Information Exchange: In line with international standards, the DTAA includes provisions for the exchange of information. Contracting states are required to share relevant information related to taxation that may result in double taxation. The exchanged information is maintained and protected as secret.
- Double Taxation Relief: Both countries apply the credit method to eliminate double taxation.
- Mutual Agreement Procedure: The DTAA includes clauses for a mutual agreement procedure to resolve disputes that may arise.
Takeaways
The DTAA between India and Greece specifies that income should be taxed in the country where it arises or, in the case of host nations, where the income is earned. This is evident from the various articles outlined in the agreement.
The credit system provided under the agreement allows taxes paid in one state to be used as a credit against a taxpayer’s liability in another state. This facilitates a fair and balanced approach to taxation for individuals or entities operating in both countries.
The exchange of information clause serves to expedite the prevention of tax evasion and maintain international standards of transparency in financial matters.
For comprehensive legal advice or additional information about the India-Greece Double Taxation Avoidance Agreement or other legal matters, please do not hesitate to contact Chandrawat & Partners. Our legal experts specialize in international tax agreements and are dedicated to providing tailored legal assistance to meet your specific needs.
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To know more about DTAA relations between India and Greece, please download our Guide.
