In major initiative aimed at preventing recurrence of the ongoing tax row between British telecom giant Vodafone Plc and the Income Tax Department, India, UK and Northern Ireland have signed a protocol amending the convention between them for the avoidance of double taxation and prevention of fiscal evasion.
The protocol, which amends the earlier convention inked in January 1993, incorporates anti-abuse (limitation of benefits) provisions to ensure that the benefits of the convention are not misused.
The protocol was signed on October 30 by Jaimini Bhagwati, India’s High Commissioner to the UK and David Gauke MP, Exchequer Secretary to the Treasury.
“Benefits of the Convention would also be available to partners of the UK partnerships to the extent income of the UK partnership are taxed in their hands. Further, the withholding taxes on the dividends would be 10% or 15% and would be equally applicable in the UK and in India,” the Finance Ministry said.
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