Current Affairs · India-France Double Taxation Avoidance Convention
Regarding the strategic update of the India-France Double Taxation Avoidance Convention (DTAC) through the signed Amending Protocol, which of the following best explains the significance of incorporating the BEPS Multilateral Instrument (MLI) provisions into the agreement?
- 1It provides a comprehensive tax holiday for all French cloud service providers until the year 2047, provided they utilize Indian data centers for their global operations.
- 2It restricts the taxing rights of the Indian government on all forms of passive income, including royalties and technical fees, to ensure they are only taxed in the country of residence of the recipient.
- 3It mandates the adoption of a unified 15% global minimum corporate tax rate for all multinational entities operating across the India-France economic corridor to eliminate tax competition.
- 4It formally incorporates anti-abuse standards, including the Principal Purpose Test (PPT), directly into the treaty to prevent treaty shopping and tax avoidance.✓
Correct answer
It formally incorporates anti-abuse standards, including the Principal Purpose Test (PPT), directly into the treaty to prevent treaty shopping and tax avoidance.
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