Cabinet approves signing of tax protocol between India and Japan

NEW DELHI: The Union Cabinet today approved signing of a protocol between India and Japan for amending the Double Taxation Avoidance Convention (DTAC) in order to facilitate tax-related exchange of information.

DTAC was signed between the two countries in 1989 for avoidance of double taxation and prevention of fiscal evasion through a protocol.

"The protocol will facilitate exchange of information as per accepted international standards on tax matters, including bank information and information without domestic tax interest," an official statement said.

There is a further provision in the protocol for sharing any information received from Japan with authorisation of the its competent authority and vice versa in respect of an Indian resident with other law enforcement agencies, it added.

The statement further said the protocol has a provision for India and Japan to offer assistance to each other in collection of revenue claims as well as for exemption of interest income from taxation in the source country with respect to debt claims insured by the government or government-owned financial institutions.