India And Austria Sign New Double Tax Treaty

by Ulrika Lomas, Tax-News.com, Brussels

08 August 2001

It was announced on Monday that the Austrian ambassador to India, Herbert Traxl, and the chairman of the Central Board of Direct Taxes, O.P. Srivastava, have signed a double taxation agreement, renegotiating and ratifying the 1963 treaty between the two countries.

'The two governments felt that there was a need to create an environment in the changed scenario to ensure that business and economy can grow,' Mr Traxl explained after signing the treaty in New Delhi. This latest move is part of an ongoing initiative to boost the flow of technology, investment, and trade between the two countries.

Mr Srivastava announced that the treaty will provide for a 10% lower tax rate on the payment of dividends, interest, royalties, and fees for technical services. It will cover income tax and surcharges in India, and both income and corporate taxes in Austria.

Although the revised convention will be effective from 5th September 2001, the CBDT chairman revealed that the provisions will not fully come into effect in Austria until January 2002, and in India three months later. However, in order to avoid double taxation in the interim, he said that India would be giving credit for taxes paid by its citizens resident in Austria, and the European country would be exempting income which is taxable in India under the terms of the agreement.

Recommended