DTAA, Vietnam - 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: 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: Tran Dai Quang

Explanation:
Vietnam’s national assembly swore in Tran Dai Quang as the 9th president of the nation. He was formally Minister of Public Security.

• From 481 valid votes, 452 choose him as the new president
• A resolution approving the presidency of Quang was also backed by NA deputies to the tune of 93% in the plenary session
• Truong Tan Sang was the 8th president of this nation