India and France sign Protocol amending 1992 Double Taxation Avoidance Convention, drop Most-Favoured-Nation clause.

Key facts

• The Protocol was signed by Ravi Agrawal, Chairperson, Central Board of Direct Taxes (CBDT), and Thierry Mathou, Ambassador of France to India.
• The Amending Protocol deletes the Most-Favoured-Nation (MFN) clause from the India-France DTAC.
• Dividend tax rate is split into 5% for holdings of at least 10% capital and 15% for all other cases, replacing the earlier flat 10% rate.
• Capital gains from sale of shares will now be fully taxable in the jurisdiction where the company is resident.
• Definition of 'Fees for Technical Services' is aligned with the India-US Double Taxation Avoidance Agreement.
• Scope of 'Permanent Establishment' is expanded by adding Service PE.
• New Article on Assistance in Collection of Taxes and updated Exchange of Information provisions are introduced.
• The Protocol incorporates Base Erosion and Profit Shifting (BEPS) Multilateral Instrument (MLI) provisions into the DTAC.