The Indian government has signed an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital (DTA) with the government of Georgia.
The DTA ensures that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment (PE) in the source state. Under the treaty, withholding tax rates on dividends, interest, royalties and fees for technical services will be set at 10%.
The agreement incorporates provisions for the effective exchange of information between the tax authorities of the two countries in line with international standards, including the exchange of banking information. It provides for the sharing of information to other agencies with the consent of the supplying state, and it incorporates anti-abuse (limitation of benefits) provisions to ensure that the benefits are availed of by genuine residents of the two countries.
It is hoped that the agreement will provide tax stability to the residents of India and Georgia and will facilitate mutual economic cooperation between the two countries.
