A Close Look into Double Taxation Avoidance Agreements with India: Some Relevant Issues in International Taxation

Abstract

In the current era of cross -border transactions across the world, due to unique growth in international trade and commerce and increasing interaction among the nations, residents of one country extend their sphere of business operations to other countries where income is earned. One of the most significant results of globalization is the noticeable impact of one country's domestic tax policies on the economy of another country. This has led to the need for incessantly assessing the tax regimes of various countries and bringing about indispensable reforms. International double taxation has adverse effects on the trade and services and on movement of capital and people. Taxation of the same income by two or more countries would constitute a prohibitive burden on the tax-payer. In view of the above discussion, the article attempts to evaluate various facets of bilateral Double Taxation Avoidance Agreements (DTAAs) with particular reference to India's network of DTAAs as a tool of tax coordination used by nations to distribute rights to tax different bases in the global fiscal commons. More precisely, an attempt has been made, in this article, to analyze and provide a brief account of the various insights in respect of double taxation avoidance agreements with India. By means of Double Taxation Avoidance Agreements, each country accommodates the claims of other nations within their fiscal arena to develop international trade and investments with minimal barriers. However, the international tax regime has to be restructured constantly so as to respond to the current challenges and drawbacks.

Keywords: Double taxation, avoidance agreements, India, bilateral, income tax.