India and Korea have come together to sign a Double Tax Avoidance Agreement (DTAA), which is set to provide relief for taxpayers in both countries. The agreement was signed on 18th July 2018, in the presence of the officials from both countries, and is expected to serve as a catalyst for robust economic cooperation and growth.
The agreement is aimed at preventing the duplication of taxes on the same income in both India and Korea. This means that taxpayers who are residents of one of the countries will not be taxed on the same income in the other country. The agreement also aims to promote and facilitate cross-border trade and investments by providing certainty and clarity to investors and businesses.
The DTAA includes provisions for taxation of business profits, dividends, interest income, royalty income, capital gains, and other income streams. The agreement also has provisions for the exchange of information between the two countries` tax authorities, which will help prevent tax evasion and facilitate the administration of tax laws.
The agreement is expected to provide significant benefits to taxpayers from both countries. For example, Korean companies with a presence in India will benefit from reduced tax rates on dividends and interest income, as well as exemption from tax on capital gains arising from the sale of shares in an Indian company. Similarly, Indian residents will benefit from reduced tax rates on interest income earned in Korea.
Overall, the India-Korea DTAA is a positive development for businesses and investors in both countries. The agreement represents a commitment by both countries to strengthen economic cooperation and promote investment. This is expected to lead to increased trade and investment flows, which will benefit both countries in the long run.
In conclusion, the India-Korea DTAA is a welcome development that will provide much-needed relief for taxpayers in both countries. It is expected to promote and facilitate cross-border trade and investment, and provide greater certainty and clarity to investors and businesses. The agreement is a significant step towards strengthening economic cooperation between India and Korea, and is expected to have a positive impact on both countries` economies in the long run.