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Australia Agrees to Stop Taxation of Offshore Income of Indian firms Providing technical Services to Australia — Orbitax Tax News & Alerts

Australia's Department of Foreign Affairs and Trade has announced the signing of a historic trade deal with India on 2 April 2022, the Australia-India Economic Cooperation and Trade Agreement. In connection with the agreement, letters were exchanged by Australia and India concerning an agreement on taxation:

  1. The Government of Australia has agreed to amend Australian domestic taxation law to stop the taxation of offshore income of Indian firms providing technical services to Australia. This would resolve the issue that the Indian Government has raised about the Double Taxation Avoidance Agreement between the Government of the Republic of India and the Government of Australia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, done at Canberra on 25 July 1991.
  2. Australia will implement the amendments to its taxation legislation referred to in paragraph 1 in a similar time period as the Agreement.

The agreement will enter into force 30 days after the ratification instruments are exchanged.