Mr. X, a man based in India, works in the United States. In return, Mr. X receives some compensation for the work done in the United States. Today, the U.S. government imposes federal income tax on income collected in the United States. However, it is possible that the Indian government may also levy income tax on the same amount, i.e. the remuneration paid abroad, with Mr. X based in India. In order to protect innocent taxpayers like Mr.
X from the harmful effects of double taxation, governments in two or more countries can enter into an agreement known as the Double Taxation Prevention Convention (DBAA). Download: Executive Report .doc: Tax Convention with Malta (.pdf .pdf 366kb) a. the term “India” refers to the territory of India and includes the high seas and airspace above it, as well as any other maritime area in which India has sovereign rights, other rights and jurisdictions under Indian law and in accordance with international law; 3. Notwithstanding paragraph 2 of this article, the interest incurred in a contracting state is: 2. Notwithstanding paragraph 1, the remuneration of a resident of a contracting state for employment in the other contracting state is taxable only in the first state, where: , aircraft, containers or other equipment used in the operation of ships or aircraft in international traffic; a. he is considered a resident of the state in which he has a permanent homeland; if he has a permanent homeland in both states, he is considered a resident of the state with which his personal and economic relations are more closely linked (vital focus); 6. Where profits contain revenue elements that are treated separately in other sections of the agreement, the provisions of this section are not affected by the provisions of this section. B. For the purposes of this article, it is considered that the profits of a business that are in fact related to the operation of a business or business activity in the United States (or are considered to be of an effective connection) are either attributable to a stable establishment in the United States, taxable in the United States under Article 6 (Real Estate Income), Section 12 (including fees and fees for services) as royalties for inclusive services, or Section 13 of convention. The agreement on double tax evasion is a treaty signed by two countries. The agreement is signed to make a country an attractive tourist destination and allow NGOs to decide whether to pay several taxes.
