A draft proposal by Liechtenstein for a Double Taxation Avoidance Agreement (DTAA) has been made available to India and is being looked into in its interest, a senior official of EE Ministry has said on Monday. The prospectus agreement will further promote economic engagement and increase business confidence in the respective jurisdictions.
Finance Ministry to Examine Proposal
The proposal is under the purview of the Finance Ministry and experts there would assess how the agreement could further boost economic ties between the two nations, Secretary (West) Sibi George further said.
During a special briefing on the visit of Prince Alois of Liechtenstein to India from October 25-28, he made the remarks. His wife, Princess Sophie, is with him, as well as a group of the country’s top-of-the-line industry partners and officials and a business delegation of top industry experts.
Focus on Investment and Trade
A DTAA is a bilateral agreement, designed to ensure that the same income is not taxed by both jurisdictions. India currently has such agreements with more than 90 countries.
Liechtenstein has been interested in signing an agreement with India as part of its efforts to further broaden the scope of trade and investment relations.
Liechtenstein takes the view that the proposed pact is a template which will give better legal and regulatory stability and predictability for the companies in Liechtenstein investing in India, George said.
Existing Investment Links
The total amount of forced foreign direct investment that has been injected into the Indian economy from Liechtenstein is around 11B USD.
The agreement has the potential to protect companies from uncertainty in tax rates and increase investments between the two countries.
But the agreement is still under review, and no official decision has been made about the deal.
The development coincides with the visit of His Royal Highness Prince Alois, a strong encouragement for the two sides to exchange ideas on deepening economic convergence and trading relations.