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Businesses are exploring opportunities to expand outside India to increase their reach and hence grow exponentially. It has increased the cross-border transactions of such globalized companies. However, this growth also brings along with it, problems in taxation and accounting of transactions; specifically, the exposure to different tax regimes and the risk of the income being double taxed. This is where the Double Taxation Avoidance Agreements (DTAAs) serve as assistants to businesses. We provide DTAA Advisory Services to our esteemed clients and help them comply with legal provisions. When there exist disagreeing rules between two countries regarding residential status and taxability of income, problems arise in the calculation of taxes and payments thereof. There is no common international ground for computation of income or taxes when two or more countries are involved. The tax laws of two countries may overlap, leading to double taxation on the same income or financial transaction or an asset. Thus arises the need for DTAA. Such DTAAs between two countries provide relief on dual taxation. Hence, a country appears as an attractive destination for a non-resident individual and company to work and stay there. With DTAAs, countries aim to stimulate and develop economic trade and investment between the agreeing countries.

There are two types of DTAAs :

  • Comprehensive DTAAs are the ones covering almost all types of incomes.

  • While Limited DTAAs are the ones covering only certain types of incomes.