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Revised DTAA with South Korea notified

India and South Korea on 26 October 2016 signed a revised Double Taxation Avoidance Agreement (DTAA) for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
●    The Provisions of the new DTAA will have effect in India in respect of income derived in fiscal years beginning on or after 1 April 2017.
●    The earlier Double Taxation Avoidance Convention between India and Korea was signed on 19 July 1985 and was notified on 26 September 1986.
●    It provides for source based taxation of capital gains arising from alienation of shares comprising more than 5 percent of share capital.
●    In order to promote cross border flow of investments and technology, the revised DTAA provides for reduction in withholding tax rates from 15 percent to 10 percent on fees for technical services and from 15 percent to 10 percent on interest income.
●    It expands the scope of dependent agent Permanent Establishment provisions in line with India’s policy of source based taxation.