In order to avoid the double taxation and prevention of fiscal evasion, an agreement and protocol has been announced by the Indian government with Lithuania with respect to taxes on income and capital. This is the first double tax agreement to be signed between India and a Baltic state.
According to the agreement, dividends will be taxed at source at a minimum rate of 5%, subject to conditions, or a maximum rate of 15%. Interest, royalties and fees for technical services are declared to be charged at a 10% rate at source. The agreement includes provisions for the exchange of tax information between the two countries similar to that of the Organization for Economic Cooperation and Development (OECD) model agreement. The agreement also incorporates an article on assistance in the collection of taxes.
