The tax treaty and Protocol implement the BEPS minimum standards to tackle tax planning strategies that exploit gaps and mismatches in tax rules.
Indian Cabinet has approved the signing of a tax treaty and a Protocol with Chile.
The tax treaty is aimed at providing tax certainty to investors and businesses of both countries, while augmenting the flow of investment through fixing of tax rates in source State on interest, royalties, and fees for technical services.
The tax treaty and Protocol implement the BEPS minimum standards such as inclusion of Preamble text, a principal purpose test, a general anti-abuse provision along with a simplified limitation of benefits clause to tackle tax planning strategies that exploit gaps and mismatches in tax rules.
India will soon complete the necessary formalities for bringing the tax treaty and Protocol into force.