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

st

 June, 2011 

PRESS RELEASE 

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 

Mozambique.

Tags-dtaa,double taxation avoidance agreement,dtaa with mozambique