India and Maldives today signed two agreements for exchange of information with respect to taxes, and for avoidance of double taxation of income derived from international air transport.
The agreements were signed during the visit of President of Maldives Abdulla Yameen Abdul Gayoom to New Delhi. Gayoom is on a two-day visit to India.
"The first agreement for exchange of information with respect to taxes enables exchange of information, including banking information, between the two countries for tax purposes, which will help curb tax evasion and tax avoidance," the Finance Ministry said in a statement.
The agreement is based on international standards of transparency and exchange of information, it said.
According to the statement, the agreement will enhance mutual cooperation between the two countries by having effective exchange of information in tax matters.
"The second agreement provides for relief from double taxation for airline enterprises of India and Maldives by way of exemption of income derived by the enterprise of India from the operation of aircraft in international traffic, from Maldivian tax and vice-versa," the statement said.
The object of the second agreement is that profits from the operation of aircraft in international traffic will be taxed in one country alone and accordingly the taxing right is conferred upon the country to which the enterprise belongs.
"The second agreement will provide tax certainty for airline enterprises of India and Maldives," the statement said.
The agreement further provides for Mutual Agreement Procedure for resolving any difficulties or doubts arising as to the interpretation or application of the agreement, it added.
