New Delhi, Feb 22 : The Indian and Kenyan governments have revised their double taxation avoidance agreement (DTAA) to bring down the withholding tax rates, protect treaty from abuse and check tax evasion, an official statement said on Thursday.
The revised DTAA was notified on February 19, said a Finance Ministry statement.
"The revised DTAA will improve transparency in tax matters, help curb tax evasion and tax avoidance, remove double taxation and will stimulate the flow of investment, technology and services between India and Kenya," it said.
The withholding tax rates have been reduced from 15 per cent to 10 per cent on dividends, from 15 per cent to 10 per cent on interest, from 20 per cent to 10 per cent on royalties and from 17.5 per cent to 10 per cent on fees for management, professional and technical services.
The revised DTAA provides for a new Article on Limitation of Benefits to allow treaty benefits to bonafide residents of both countries, to combat treaty abuse by third country residents and to allow application of domestic law to prevent tax avoidance or evasion, said the statement.
The Article on Exchange of Information has been updated to the latest international standard to provide for exchange of information, including banking information for tax purposes, to the widest possible extent.
Further, a new Article on Assistance in Collection of Taxes has also been provided in the revised treaty which will enable assistance in collection of tax revenue claims between both countries.
The DTAA between India and Kenya was signed and notified in 1985.
Later, the DTAA was renegotiated and a revised DTAA was signed between both countries on July 11, 2016.
The notification happened last Monday.
--IANS
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Source: IANS
