By IANS,
New Delhi : India Wednesday signed a tax treaty with the former Soviet republic of Georgia that would help track black money and boost bilateral trade and investments.
“The agreement will provide tax stability to the residents of India and Georgia and will facilitate mutual economic cooperation between the two countries,” an official statement released after signing of the agreement said.
“It will also stimulate the flow of investment, technology and services between India and Georgia,” the finance ministry said in the statement.
Central Board of Direct Taxes chairman M.C. Joshi and Ambassador of Georgia to India Zurab Katchkatchishvili signed the agreement here. The two countries have signed the agreement for avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital.
According to the terms of the agreement, business profits will be taxable in the source state if the activities of an enterprise constitute a “permanent establishment” in the source state.
The treaty incorporates provisions for effective exchange of information between tax authorities of the two countries in line with best international standards, including exchange of banking information and supplying of information without recourse to domestic interest.
The agreement has an article on assistance in collection of taxes, including provision for taking measures of conservancy.