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India Sign DTAA with Mozambique

India has signed DTAA Double taxation avoidance agreement with Mozambique. Double tax aviod agreement is the deal between two countries by which the tax payer need to pay income tax to one country of which it dues, and by showing the certificates of income tax paid, the second country can not ask to repay the income tax. Some transactions are like this in which one works part time to different country or work in home country to the foreign country. In such cases the Double taxation avoid agreement works.

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
 June, 2011 
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

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