Language in tax treaties a challenge

Hyderabad, July 1 (UNI) Income Tax Appellate Tribunal Vice-President N D Ragahvan roday said the language used in tax treaties was a challenge with regard to International Taxation.

Speaking at a seminar on 'TDS (tax deduction at source), EPC (engineering procurement and construction) Contracts and Outbound Investments' here yesteray, he said the language of tax treaties left considerable scope for interpretation. As a result, various issues like conflict of source, qualification and interpretation of domstic law come up for adjudication.

He said this called for greater cooperation between countries, so that conflicts were resolved in the best interest of trade promotion.

The sub-chapter to the Indian Branch of the Rotterdam-based International Fiscal Association (IFA), an international forum for discussing international tax issues, Cross Border Trade and Commerce organised the seminar.

The Central Board of Direct Taxes, National Institute of Public Finance and Policy and Reserve Bank of Inida, Authority for Advance Ruling, Deparatment of Legal Affairs (Ministry of Law, Justice and Company Affairs), The Supreme Court and High Courts were IFA members.

Secretary of the Association V Jawahar said Indian industry was in metamorphoses, reaching out to potential overseas markets and was in the process of setting up its enterprises outside India to become global players.

He said it was very relevant to comprehend statutory compliances with respect to Exchange Control Regulations. Taxation laws of the destination country were of paramount importance.

Around 100 corporate and individual representatives participated in the seminar.

UNI BR AA 1501