India ratifies OECD's convention to examine tax evasion | Current Affairs, Current Affairs 2019

India ratifies OECD’s convention to examine tax evasion

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India has ratified the Organisation for Economic Cooperation and Development (OECD)’s multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting (BEPS), according to the ministry of finance.

The multilateral convention will enter into force for India on 1 October 2019 and its provisions will have effect on India’s double taxation avoidance agreement (DTAA) from 2020-21 onwards. The Union Cabinet had approved ratification of the convention in June 2019 .

Out of 93 covered tax agreements (CTAs) notified by India, 22 countries have already ratified the convention as on date and the DTAA with these countries will be modified by the convention. The convention will modify India’s treaties in order to reduce revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxes where substantive economic activities generating profits are carried out and where value is created.

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