India-Singapore Double Tax Changes In Force

by Mary Swire, Tax-News.com, Hong Kong

23 March 2017

On March 23, India published a notice in its Official Gazette confirming that a third Protocol to the double tax agreement with Singapore has entered into force.

The protocol is aimed at limiting abuse of the Indo-Singapore tax treaty. It provides India with the right to tax capital gains arising from the alienation of shares acquired on or after April 1, 2017. The protocol provides that in respect of capital gains arising during the transition period from April 1, 2017, to March 31, 2019, the tax rate will be limited to 50 percent of the Indian domestic tax rate (subject to the limitation of benefits clause).

The protocol provides for a new limitation of benefits clause to ensure that the protocol can only be enjoyed by tax residents with substantive economic activities.

The protocol was signed on December 30, 2016, and entered into force on February 27, 2017.

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