No.402/92/2006-MC (18 of 2008)
Government of India / Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi dated the 3rd April 2008
The Government of the Republic of India signed a Double Taxation Avoidance Agreement (DTAA) with the Government of the Union of Myanmar for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 2nd April, 2008 during the visit of HisExcellency Maung Aye, Vice Senior General and Vice Chairman, State Peace and Development Council to India. The Agreement was signed by Shri P.K. Misra, Chairman, Central Board of Direct Taxes on behalf of the Government of India and by Mr. Kyi Thein, Ambassador Extraordinary and Plenipotentiary of the Union of Myanmar to the Republic of India, on behalf of the Government of the Union of Myanmar.
The DTAA will cover in the case of India, income-tax and surcharge and in the case of Myanmar, the income tax and profit tax. The DTAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state. Examples of permanent establishment include a branch, factory, place of management, sales outlet etc. Profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for 270 days or more. Profits derived by an enterprise from the operation of ships or aircraft in international traffic shall be taxable in the country of residence of the enterprise. Dividends, interest and royalty income will be taxed both in the country of residence and in the country of source. However, the maximum rate of tax to be charged in the country of source will not exceed 5% in the case of dividends and 10% in the case of interest and royalties. Capital gains from the sale of shares will be taxable in the country of source. The Agreement also incorporates provisions for exchange of information between tax authorities of the two countries and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries.
The Agreement will provide tax stability to the residents of India and Myanmar and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Myanmar.