India and France have signed an amending protocol to revise the India-France Double Taxation Avoidance Convention (DTAC). In a statement, the Ministry of Finance informed that the protocol was signed during the recent visit of French President Emmanuel Macron to India. It added that the Chairperson of the Central Board of Direct Taxes, Ravi Agrawal, signed the protocol with the Ambassador of France to India, Thierry Mathou. Under the amended provisions, the country where the company is resident will have full taxing rights on capital gains arising from the sale of shares.
The amending protocol also deleted the so-called Most-Favoured-Nation (MFN) clause from the protocol to the DTAC, thereby resolving all issues related to it. It also modified the definition of "Fees for Technical Services" in line with the definition in the India-US Double Taxation Avoidance Agreement. The amending protocol also updated the provisions on the exchange of information and introduced a new article on assistance in the collection of taxes, in accordance with international standards.
This would enable and facilitate the seamless exchange of information and strengthen mutual tax cooperation between India and France. The changes introduced through the amending protocol will come into effect after the completion of the internal procedures under the laws of both countries and subject to the terms agreed between the two countries.