DTAA, Israel - Current Affairs Questions and Answers

ANSWER: DTAA

Explanation:
India and Singapore on 30th Dec 2016 signed the 3rd protocol for amending Double Taxation Avoidance Agreement (DTAA).

This revisiting of the treaty is important as it will help the government in its efforts to eliminate black money from India.

The DTAA was signed or avoidance of double taxation as well as for prevention of fiscal evasion in relation to the taxes on income.

It will come to an effect from 1 April 2017.

It provides for source-based taxation of capital gains arising on transfer of shares in a company.

This amendment will help in curbing the revenue loss as well as in preventing double non-taxation.

It will also streamline the slow of investments.

During the two years called as transition period (from 1 April 2017 to 31 March 2019) the capital gains on shares will be taxed at half of normal tax rate (in source country), subject to fulfilment of conditions in Limitation of Benefits clause.

It also inserts provisions to facilitate relieving of economic double taxation in transfer pricing cases.

It enables application of domestic law and measures concerning prevention of tax avoidance or tax evasion.

However, the amendment grandfathers all investments in shares made before 1 April 2017.

The grandfathering will be subject to fulfilment of conditions in Limitation of Benefits clause as per 2005 Protocol.

The amendments are in line with India’s commitment under Base Erosion and Profit Shifting (BEPS) Action Plan.

Know More About BEPS

• The OECD’s Action Plan on BEPS was published in July 2013 with a view to addressing perceived flaws in international tax rules.
• The 40 page Action Plan was negotiated and drafted with the active participation of its member states.
• It contained 15 separate action points or work streams, some of which were further split into specific actions or outputs.
• The Plan was squarely focused on addressing these issues in a coordinated, comprehensive manner, and was endorsed by G20 leaders and finance ministers at their summit in St. Petersburg in September 2013.

ANSWER: Israel

Explanation:
Israeli Prime Minister, Benjamin Netanyahu called the US Ambassador Daniel Shapiro to Israel for a special meeting over the UN’s resolution condemning Israeli settlements on Palestinian territory.

Shapiro was summoned on 25 December 2016.

His summon came hours after 14 envoys of other United Nations Security Council (UNSC) member states were asked to appear before the Israel foreign ministry.

Shapiro was called in to discuss United States’ decision to abstain from voting, which eventually led to the adoption of the resolution.

Israel’s Prime Minister called the resolution shameful and rejected it out rightly. Apart from this,

Netanyahu has also instructed Israel’s ambassadors to New Zealand and Senegal to return immediately to Israel for consultations in response to the newly passed resolution.

Netanyahu also added that Jerusalem will also be re-assessing its ties with the United States. He is hoping that the decision would be reversed once Trump takes over.

US decision to abstain is the work of the Obama administration.

About the UN resolution

• It demands a quick end to all Israeli settlement building activities on the occupied Palestinian territory including East Jerusalem.
• It was initially created by Egypt but was withdrawn later, as the country was unsure of its chances of passing, especially after US President-Elect Donald Trump asked the current US administration to veto it.
• However, it was re-introduced to the UNSC by member states namely Malaysia, New Zealand, Venezuela and Senegal on 23 December 2016.
• In spite of the intense efforts put in by Israeli Prime Minister and Donald Trump to ensure the United States blocks the resolution, the US abstained from voting.
• The resolution was eventually adopted with 14 out of 15 UNSC members voting in favour of it.
• This marks the first resolution that has been adopted by the UNSC on the Israeli-Palestinian conflict since 1979.

ANSWER: Cyprus

Explanation:
Union Cabinet cleared a new India-Cyprus Double Taxation Avoidance Agreement providing for source based taxation of capital gains on transfer of shares instead of one based on residence.

• Cabinet approved the revised DTAA and it was agreed to provide to provide for source based taxation of capital gains on transfer of shares. A grandfathering cause will be provided for investments made prior to April 1, 2017 in respect of which capital gains would be taxed in the country where the taxpayer resides.
• India and Cyprus have a DTAA since 1994 and the foreign nation is a major source of foreign funds flow in the country. From April 2000 till March 2016, India received foreign direct investment to the tune of INR 42,680.76 crore from Cyprus. Completion of negotiation on avoidance of double taxation and prevention of fiscal evasion has paved the way for the removal of Notified Jurisdictional Areas respectively from November 2013.
• India also took this as a major step in the fight against tax evasion, base erosion and profit shifting.

ANSWER: 10

Explanation:
India and Israel on 15th October 2015 signed 10 MoUs during the Indian President’s state visit to Israel. Mukherjee is the first ever Indian President to visit Israel including the following:

- Protocol amending the Convention and the Protocol for the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with respect to taxes on income and on capital
- Cultural Exchange Programme for the years 2015-2018
- MoU between JNU, New Delhi and Ben-Gurion University of the Negev
- Agreement of Cooperation between the Hebrew University of Jerusalem and IIT, Kharagpur
- MoU for Institutional Collaboration between Indian Institute of - Technology, Kharagpur (IITKGP) and Ben-Gurion University of the Negev, (BGU)
- MoU between Jawaharlal Nehru University, New Delhi and Hebrew University of Jerusalem, Israel
- Framework for Academic Collaboration between the Indian Institute of Technology Kharagpur and the University of Haifa, Israel:
- MoU between the University of Delhi, Delhi and Ben-Gurion University of the Negev, (BGU), Beer Sheva, Israel:
- Agreement of Cooperation between the Hebrew University of Jerusalem, Israel and the University of Delhi, India

ANSWER: Old City

Explanation:
Israel Police on 4th October 2015 banned Jerusalem’s Palestinian residents from entering Old City for two days . However, there will also be age limitation on worship at the Al-Aqsa mosque which is holy to both Jewish and Muslim communities. The closure is focused on protecting people during the Jewish holiday of Sukkoth. Close to 3 lakh Palestinians live in east Jerusalem where the Old City is located.

ANSWER: Israel

Explanation:
Israeli lawmakers voted 69 to 17 to increase the punishments, approving legislation proposed after a wave of Palestinian protests last year in East Jerusalem.