In a move that will help curb tax evasion and tax avoidance between India and New Zealand, the Government of India has notified the third protocol between India and New Zealand for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.
The taxman of New Zealand and Inda – Inland Revenue Department (IRD) and Income Tax Department respectively, will be able to share information to prevent double taxation, thus essentially meaning that those who have income on both sides will have to declare their incomes.
India’s Central Board of Direct Taxes (CBDT) on Tuesday, November 7 issued notifications regarding the Indian Government signing its third protocol for amendment of the convention with the government of New Zealand for the avoidance of double taxation.
“It [notifying of third protocol] is all part of providing a facilitating environment for expansion of economic and commercial engagement between the two countries.
“Clarity and predictability, backed by a rule-based regime, always act as a necessary stimulant for the businesses and investors,” Mr Kohli told The Indian Weekender.
The convention between the two countries came into force in December 1986 and was amended by a first protocol in 1997 and the second protocol in 2000.
It is important to note that India has proposed to amend the convention through a third protocol further to update the exchange of information article as per the international standard and insert an article on assistance in the collection of taxes.
The third protocol was signed between both the countries on October 26, 2016, when the then Prime Minister Sir John Key visited India.
The protocol entered into force in India on September 7, 2017, and has been notified in the Official Gazette on November 2, 2017.
As per the statement from the India’s Ministry of Finance, the prevention of fiscal evasion will fall in respect to the taxes on income.