No.402/92/2006-MC (12 of 2011)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi dated the 1
The Government of India notified the Double Taxation Avoidance
Agreement (DTAA) with the Government of Mozambique for the avoidance of
double taxation and for the prevention of fiscal evasion with respect to taxes
on income on 31st May, 2011.
The DTAA provides that business profits will be taxable in the source
state if the activities of an enterprise constitute a permanent establishment in
the source state. Examples of permanent establishment include a branch,
factory, office, place of management, etc. Profits of a construction, assembly
or installation projects will be taxed in the state of source if the project
continues in that state for more than 12 months.
Profits derived by an enterprise from the operation of ships or aircraft in
international traffic shall be taxable in the country of residence of the
enterprise. Dividends, interest and royalties income will be taxed both in the
country of residence and in the country of source. However, the maximum
rate of tax to be charged in the country of source will not exceed 7.5% in the
case of dividends and 10% in the case of interest and royalties. Capital gains
from the sale of shares will be taxable in the country of source.
The Agreement further incorporates provisions for effective exchange
of information and assistance in collection of taxes between tax authorities of
the two countries in line with internationally accepted standards including
exchange of banking information and incorporates anti-abuse provisions to
ensure that the benefits of the Agreement are availed of by the genuine
residents of the two countries.
The Agreement will provide tax stability to the residents of India and
Mozambique and facilitate mutual economic cooperation as well as stimulate
the flow of investment, technology and services between India and
Tags-dtaa,double taxation avoidance agreement,dtaa with mozambique