The Bhutanese Leading the way.
The National Assembly (NA) endorsed the Double Tax Avoidance Agreement (DTAA) between the Royal Government of Bhutan and Government of India (GoI) during its session on Thursday.
The Royal Government of Bhutan has signed the agreement with GoI for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.
The agreement was signed in New Delhi on March 4, 2013 by the previous Finance Minister Wangdi Norbu and the Indian Finance Minister P. Chidambaram.
The DTAA was signed at a time when Bhutan was eagerly trying to attract foreign investments, especially Indian investments, given the continuing balance of payments deficits with India.
The DTAA also has attractive provisions for educational institutions and health facilities, in line with the Fiscal Incentives 2010.
The DTAA will minimize the incidences of juridical and economic double taxation of income in the two countries and thus remove obstacles to remove obstacles to cross border trade and investment flows.
The agreement will also strengthen the tax administration in the country with the mechanism of exchange of information which will address the issue of cross border tax evasion.
The DTAA once implemented will ensure certainty to both the investors from India as well as to our own domestic taxpayers conducting business in India.
DTAA is the first such agreement negotiated and signed by Bhutan. Three rounds of negotiations were held at technical working level. The first negotiation was held from August 3-7, 2009 at New Delhi. The second negotiations were held from October 18-20, 2010 at Thimphu and the third round of negotiation was held from January 24-31, 2011 at New Delhi.
The agreement was endorsed by all the Assembly members.
