India ratifies convention to check tax evasion

The board said that the MLI will modify India’s tax treaties to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out.

It added that MLI will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures. “Out of 93 CTAs notified by India, 22 countries have already ratified MLI as on date and the DTAA with these countries will be modified by MLI,” it said. After the MLI takes effect, India’s DTAA will have a new Preamble and Principal Purposes Test. Changes would also lead to curbing of artificial avoidance of Permanent Establishment status through various arrangements. —FE