New world order for

international taxation

Multilateral Instrument

CA Monika Wadhani

16 August 2017

2

Multilateral Instrument -overview

3

MLI – certain basic concepts

Subsequent changes / modifications to MLI positions

possible – withdrawal from MLI also possible

Changes to MLI

positions

Will not replace the existing treaty, but operate alongside it

– supplement, compliment, modify its application

Impact on

existing treaty

Not automatically applicable – will apply only if both the

countries notify their treaty as a CTAApplicability

No – subsequent modification to the CTA possibleWill it freeze the

treaty?

To be interpreted in accordance with the ordinary principle

of treaty interpretation

Basic rule of

interpretation

4

Reservations Optional provisionsMinimum Standards

• Flexibility to opt out of a

provision if it is not a

minimum standard

• Option to choose among

alternative provisions

intended to address the

same issue

• Both the countries to

choose the same option in

order for it to apply

• All countries to meet

certain minimum

standards (Action 6 -

Treaty Abuse; Action 14

– Dispute Resolution)

• No leeway to opt out of

the minimum standards,

except in limited cases

MLI – Framework

Compatibility clauses

• Defines the relationship / addresses conflict between the

MLI and the provisions of a CTA

• MLI provision applies –

• ‘in place of’

• ‘applies to’ or ‘modifies’

• ‘in the absence of’

• ‘in place of or in the absence of’

Notification clauses

• Notify choice of optional

provision

• Also, notify the existing

provision of CTA to be

modified / replaced

5

MLI - SnapshotWhether the country

is a signatory to

MLI?No

Provisions of

existing treaty to

apply

Whether the treaty

with India is notified as

CTA

Provisions of MLI to

apply

Reservation made by

either of the countries

vis-à-vis the Article

Whether the Article

is a minimum

standard?

Yes

No Yes

Yes No

Optional provision opted

by both the countries

No Yes

Yes

No

6

Process timeline for entry in effect

7 June 2017

At least 5

countries to

submit

instruments

of

ratification

Signing

ceremony in

Paris

3 months

Entry in

force vis-à-

vis those

countries

Entry in force

on the first day

of the calendar

month after the

expiry of 3

months

Entry into

effect

from taxable year

beginning after six months

from the date of entry into

force in the later of the two

jurisdictions

For other taxes

For WHT taxes

from next calendar / taxable

year after entry into force in

later of the two jurisdictions

7

MLI - status

India has notified its Tax Treaties with 93 countries as CTAs under MLI

Out of 93 countries, 41 countries have not signed MLI as on date

Out of the balance 52 countries, 3 countries have not included India in their CTAs

49 countries have notified India in their CTAs

70 countries (including India) have signed the MLI till date

8

Status of other countriesCountries which have not included India in their list

of CTAs

Some countries which have not signed MLI

Some countries which have included India in

their list of CTAs

• Mauritius

• China

• Germany

• USA

• Qatar

• UAE

• Malaysia

• Philippines

• Saudi Arabia

• Brazil

• Thailand

• Kenya

• Singapore

• Netherlands

• Australia

• United Kingdom

• France

• Canada

• Japan

• Sweden

• Luxembourg

• Spain

• Korea

• Cyprus

India has also provided provisional list of reservations

9

Articles under MLIParts Articles Minimum std / optional and

India’s Position

Part I: Scope and Interpretation of

Terms

Article 1 and

2

-

Part II: Hybrid Mismatches:

• Transparent Entities

• Dual Resident Entities

• Methods for elimination of double

taxation

• Article 3

• Article 4

• Article 5

• Optional

• India has opted out of Article

3 and 5

• India has clarified that similar

provision is already existing

in all its 93 CTAs

Part III: Treaty Abuse

• Purpose of CTA (Preamble)

• Prevention of Treaty Abuse

• Dividend transfer transaction

• CG from alienation of

share/interest deriving value from

Immovable Property

• Anti-abuse rule for PE in third state

• Taxing rights for own residents

• Article 6

• Article 7

• Article 8

• Article 9

• Article 10

• Article 11

• Articles 6 & 7 – Minimum

standard. In addition to PPT,

India has opted for SLOB

• Articles 8 to 11 – Optional.

India has opted for Articles 8

and 9(4) & India’s position is

silent vis-à-vis Articles 10 &11

10

Articles under MLIParts Articles Minimum std / optional and

India’s Position

Part IV: Avoidance of Permanent

Establishment Status through:

• Commissionaire Arrangements

• Specific Activity Exemptions

• Splitting up of Contracts

Definition of closely related Person

• Article 12

• Article 13

• Article 14

• Article 15

• Optional

• No reservations made by

India

• W.r.t Article 13, India has

chosen Option A

Part V: Improving Dispute

Resolution

Article 16 & 17 • Minimum Standard – India

has expressed reservation on

MAP application in COS

Part VI: Arbitration Article 18 to 26 • Optional – India has opted out

of it

Part VII: Final Provisions Article 27 to 39 -

11

Part III of MLI and BEPS Action Plan 6 – Prevention of Treaty Abuse

12

Article 6 – Purpose of CTA [Preamble]“…to eliminate double taxation with respect to taxes covered by

this agreement without creating opportunities for non-taxation or

reduced taxation through tax evasion or avoidance (including

though treaty-shopping arrangements….)”

Minimum Standard

Compatibility clause – ‘in place of or in absence of’

India’s position – no CTA notified

13

Preamble – few examples

India-Mauritius

Tax Treaty

India-Singapore

Tax Treaty

The Government of ……….., desiring to conclude an Agreement

for the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income, have agreed as follows

The Government of ……., desiring to conclude a Convention for

the avoidance of double taxation and the prevention of fiscal

evasion with respect to taxes on income and capital gains and for

the encouragement of mutual trade and investment, have agreed

as follows

India-

Luxembourg Tax

Treaty

The Government of …., desiring to conclude an Agreement for the

avoidance of double taxation and the prevention of fiscal evasion

with respect to taxes on income and on capital and with a view to

promoting economic co-operation between the two countries,

have agreed as follows

14

Article 7: Prevention of Treaty Abuse

- PPT

- PPT along with Simplified or Detailed LOB

- Detailed LOB supplemented by anti-conduit mechanism

PPT as default option

Simplified LOB optional

Opted for PPT along with Simplified LOB

Action 6

MLI

India

15

• Para 1 – PPT is a mandatory minimum standard to be adopted

• Para 2 – Compatibility clause - Para 1 to apply in place of or in absence of existing

provisions of CTA

• Para 3, 4 & 5 – Option to make application to CA and Discretionary powers to CA to

grant treaty benefits

• Para 6, 7 and 16 – Applicability of SLOB

• Para 8 to 13 – Provisions of SLOB Clause

• Para 14 – SLOB clause to replace existing LOB clause if any in CTA, but shall not

reduce scope of application of other types of anti-abuse rules in CTA

• Para 15 – Right to reservations

• Para 17 – Notification to Depositary

Article 7: Prevention of Treaty Abuse

16

Principal Purpose Test• Notwithstanding any provisions of a CTA, a benefit under the CTA shall not be granted if

it is reasonable to conclude that one of the principal purposes of any transaction or

arrangement is to obtain benefit under the Tax Treaty

− Unless it is established that granting benefit would be in accordance with

the object and purpose of the Tax Treaty

• Supplements and does not restrict the scope or application of other provisions

• A benefit that is denied under other para cannot be claimed under this para

• Non-obstante clause – benefits available under other para can be denied under this para

• ‘Benefit’ includes all limitations on taxation imposed on the State of source (Eg: a tax

reduction, exemption, deferral or refund), relief from double taxation provided by Article

23, Protection afforded to residents and nationals under Article 24 or any other similar

limitations

• Obtaining the benefit under a tax convention need not be the sole or dominant purpose –

should be one of the principal purpose

17

• Provisions wider than GAAR

• ‘Arrangement or Transaction’ should be interpreted broadly and include any agreement,

understanding, scheme, transaction or series of transactions, whether or not they are

legally enforceable.

• Requires objective analysis and not conclusive proof of the aims and objects of all

persons involved in putting that arrangement or transaction in place

• ‘Subjectivity involved in demonstrating that ‘principal purpose’ is not to obtain a tax

benefit

• In cases where the PPT is not satisfied, it may result in denial of Tax Treaty benefits

such as - Lower rate of WHT, restricted definition of royalty / FTS, Non-applicability of

beneficial Permanent Establishment provisions, Capital gain tax exemption, etc.

Imperative to demonstrate substance and commercial rationale

Principal Purpose Test

18

Parent Co. holds entire share capital in

S Co and has granted loan to S Co.

T Co acquires all the shares and debt

of S Co. from Parent Co.

No Tax Treaty between Country T and

country S

Interest paid by S Co. to T Co. subject

to WHT @ 25%

No WHT on interest under S – R Tax

Treaty

Interest paid by R Co to T Co subject to

WHT @5%

T Co. transfers the loan to R Co. in

exchange of a promissory note

T Co.

Parent Co

Country T

Country S

1. Sale of shares

of S Co

2. Transfer of

loan

S Co.

R Co.

Country R

Loan

3. Transfer of loan

4. Promissory

note

6. Interest

5. Interest

PPT Rule: Example 1 – Interest deduction

BEPS Recommendation:

While the loan may have been granted to S

Co for a valid commercial reasons, if it is

shown that one of the principal purposes of T

CO in transferring the loan to R Co. was to

obtain the benefit of R–S Tax Treaty, then

the benefits could be denied under Para 7

19

PPT Rule: Example 2 RCo, a company resident of State R, is in the business of

producing electronic devices and its business is expanding

rapidly.

It is now considering establishing a manufacturing plant in a

developing country in order to benefit from lower manufacturing

costs.

After a preliminary review, possible locations in three different

countries are identified. All 3 countries provide similar

environments.

After considering the fact that State S is the only one of these

countries with which State R has a tax convention, the decision

is made to build the plant in that State.

Can treaty benefit be denied?

State A

R Co.

State B

State S

BEPS recommendations

• Whilst the decision to invest in State S is taken in the light of the benefits provided by the State

R-State S tax convention, it is clear that the principal purpose for making that investment and

building the plant are related to the expansion of R Co’s business and the lower manufacturing

costs of that country

• Given that a general objective of tax conventions is to encourage cross-border investment,

obtaining the benefits of the State R-State S convention for the investment in the plant built in

State S is in accordance with the object and purpose of the provisions of that convention

20

PPT rule not to apply if R Co undertakes significant FAR for providing services through its own

personnel

T Co

X Co Y Co Z Co Q Co

R Co • T Co owns number of operating

subsidiaries in different countries

• It sets up R Co, regional company, to

render accounting, legal, HR, financing

& treasury services, etc.

• This decision is mainly driven by

o Availability of skilled labour, reliable

legal system, business friendly

environment, political stability,

sophisticated banking industry,

etc.; and

o the comprehensive double taxation

Tax Treaty network of State R

PPT Rule: Example 3 – Management services

21

• India’s position

− Notified Articles in 36 Tax Treaties

− MLI provision will replace the existing

provision in these Treaties, subject to

similar notification by other countries –

e.g. UK, Luxembourg

− In other cases, PPT will supersede the

exiting provisions only to the extent of

incompatibility

• Impact on grandfathering under India-

Singapore Tax Treaty?

− Whether PPT to be satisfied in addition to

the existing PPT/LOB conditions?

− Whether granting benefit (subject to

satisfaction of the existing LOB

conditions) would be in accordance with

‘object and purpose’ of the Treaty?

Principal Purpose Test – India impact

A Singapore tax resident would not be

entitled to the capital gains tax benefit

arising on transfer of shares of an Indian

company, if

a) Its affairs were arranged with the

primary purpose to take the

advantage of that benefit; or

b) the company claiming the benefit is a

‘shell or a conduit company’

Singapore PPT

22

Simplified LOBArticle 7:

Para no

Particulars

8 Resident shall not be entitled to the benefits of treaty, unless it

constitutes a “qualified person” [‘QP’]

9 Who constitutes a QP

10 Alternative test – active conduct of business

11 Derivative benefits

12 Discretionary relief by the CA [‘CA’]

13 Definitions

23

• Tax Treaty benefits available only to ‘qualified person’, which covers:

− Individual

− Contracting jurisdiction / political subdivision/ local authority

− Listed entity

− NGO / regulated retirement benefit entity

− Entity in which atleast 50% shares held by above persons who are residents of the

State, on atleast half of the days in 12 month period

• Tax Treaty benefits to be available to non-qualified persons engaged in ‘active

conduct of business’ if income derived from other State ‘emanates from’ or ‘is

incidental to’ that business

• Active conduct of business - only if persons through whom the entity is acting, such as

officers or employees of a company, conduct substantial managerial and operational

activities

• Activities not falling under ‘active conduct of business’

− Operating as Holding Company

− Supervision / administration of group companies

− Group financing

− Making / managing investments (except banks / insurance cos / registered security

dealer)

Simplified LOB

24

Simplified LOB• Income ‘emanates from’ active conduct of business if

− There is factual connection between the actively connected business and item of

income

− Important to compare lines of business – upstream or downstream

• Complimentary business activity

− Part of same overall industry

− Need not relate to the same product or service

• Income is ‘incidental to’ the business if production of the item facilitates the conduct of

the business

− Income derived from the temporary investment of working capital

• Derivative Benefit:

− A resident who is not a QP shall also be entitled to tax treaty benefits if, on at least

half of the days of any twelve-month period that includes the time when the benefit

would otherwise be accorded, persons that are ‘Equivalent Beneficiaries’ own,

directly or indirectly, at least 75% of the beneficial interests of the resident

• Optional provision – applicable only if both the parties opt for it

• Possible to apply Simplified LOB symmetrically or asymmetrically

25

Example 1

A Co. is a company resident of State A

Engaged in manufacturing business in State A

Owns 100 per cent of the shares of BCO, a

company resident of State B

B Co. distributes A Co’s products in State B

Whether dividends paid by B Co to A Co entitled to

treaty benefits?

A Co.

Country A

Country B

B Co.

Manufacturing business

Distribution of

products of A Co. in

country B

100%

Distribution activity of B Co is “factually connected”

to A Co’s manufacturing activity

Dividends paid by B Co to be treated as “emanating

from” A Co’s business

26

A Co. is a company resident of State A

Operates a large R&D facility in State A

It licenses intellectual property to affiliates worldwide

Owns 100 per cent of the shares of BCO, a company

resident of State B

A Co. licenses intellectual property to B Co.

BCO then manufactures and markets the A Co designed

products in state B

Whether royalty paid by B Co to A Co entitled to treaty

benefits?

A Co.

Country A

Country B

B Co.

Operates R&D

facility

Manufacturing &

marketing

products of A Co

100%

Licensing

of IP

Example 2

Activities of B Co are “factually connected” to A Co’s

business

Royalty paid by B Co to be treated as “emanating

from” A Co’s business

27

Hold Co. is a parent company of Op Co 1 and Op Co 2

Op Co 1 and Op Co 2 are engaged in business of

manufacturing of same product in their respective

countries

Whether dividends paid by Op Co 2 to Hold Co eligible for

treaty benefits?

– Whether Hold Co engaged in active conduct of

business?

– If yes, whether dividends paid by Op Co 2 “emanates

from” Hold Co’s business?

Hold Co

Country A

Country B

Op Co 2

Manufacturing

Manufacturing

100%

Example 3

Hold Co is deemed to be engaged in active conduct

of business on account of activities carried out by

connected person, Op Co 1

However, dividends paid by Op Co 2 cannot be said

to be “factually connected” to Hold Co’s business –

treaty benefits not available

Op Co 1

100%

28

Hold Co. is a parent company of Op Co 1 and Op Co 2

Op Co 1 is engaged in business of manufacturing of

product in country A

Op Co 2 supplies input material to Op Co 2 for its

manufacturing

Whether dividends paid by Op Co 2 to Hold Co eligible for

treaty benefits?

– Whether Hold Co engaged in active conduct of

business?

– If yes, whether dividends paid by Op Co 2 “emanates

from” Hold Co’s business?

Hold Co

Country A

Country B

Op Co 2

Manufacturing

Supply of input

material

100%

Example 4

Hold Co is deemed to be engaged in active conduct

of business on account of activities carried out by

connected person, Op Co 1

Activities carried on by Op Co 2 provides upstream

inputs for use by Op Co 1 – “factually connected”–

treaty benefits available

Op Co 1

100%

29

Simplified LOBEntitlement to Treaty Benefits where SLOB is applicable:

Resident

Qualified Person

(Under Para a to

e)

Active Conduct

of Business TestOwnership Test

Discretionary

ReliefOR OR OR

Entitled to Treaty Benefits

AND

Treaty Benefits Denied

No

No

30

Simplified LOBInterplay between Paras 6, 7 and 16 on Applicability of SLOB

Whether both Contracting Jurisdiction (‘CJ’) have chosen to additionally adopt SLOB as per

Para 6?

PPT + SLOB

Whether CJ that doen’t want to apply SLOB,

enters into agreement with other CJ to apply

SLOB either symmetrically or asymmetrically

as per Para 7 (a)/(b) ?

PPT + SLOB (symmetrically/

asymmetrically, as the case may

be)

CJ that wants to apply SLOB, has

option to opt out of para 7 of MLI

completely and adopt minimum

standard as per bilateral

negotiations – Para 16

Yes No

Yes No

31

Simplified LOB – India impact

• Albania

• Armenia

• Iceland

• Mexico

• Sri Lanka

• Tajikistan

• Tanzania

• Uruguay

• USA

Countries that have chosen to apply Simplified LOB

• Argentina

• Armenia (India’s CTA)

• Bulgaria (India’s CTA)

• Chile

• Colombia (India’s CTA)

• Indonesia (India’s CTA)

• India

• Mexico (India’s CTA)

• Russia (India’s CTA)

• Senegal

• The Slovak Republic

(India’s CTA)

• Uruguay (India’s CTA)

Countries that already have Simplified LOB in

Tax Treaty with India

Countries where Simplified LOB to become applicable

• Bulgaria

• Colombia

• Indonesia

• Russia and

• The Slovak Republic

32

Action 6 – Treaty abuse – other Articles

Dividend Transfer

Transactions

ARTICLE 8 ARTICLE 9 ARTICLE 10

Gains from

alienation of

shares of entities

deriving value

principally from

immovable

property

Anti-abuse rule

for PE situated

in third State

ARTICLE 11

Application of

Tax Treaty to

restrict State’s

right to tax its

own residents

Not a minimum standard

No reservation made by India

33

Minimum shareholding to be met throughout 365 days for beneficial dividend tax rate

Article 8 - Dividend Transfer Transactions

Reservation made by India

Some of the Countries which have made

reservation on applicability

Treaties notified by India

• Portugal - higher

threshold of 2 years

mentioned in the Tax

Treaty

• Canada

• Denmark

• Singapore

In above cases, minimum

shareholding period will not

apply

21 Tax Treaties notified;

some of them being -

• Canada

• Denmark

• Qatar

• Italy

• Singapore

• USA, etc.

34

Gains to be taxable if value threshold met at any time during 365 days preceding

alienation (including alienation of interest in a trust / partnership)

Article 9 - Gains from alienation of shares of entities deriving value from immovable property

Some countries which have made reservation on

applicability

• Canada

• Singapore

• UK

In above cases, this

provision should not apply

Treaties notified by India

71 Tax Treaties notified,

including :

• Cyprus

• France

• Netherlands

• Australia

Provision gets replaced in the

above Tax Treaties

35

• Benefit of Tax Treaty shall not be available to the tax payer where income is derived

from the source State by the PE of such tax payer situated in third State, if

- Such income of the PE is not taxable in the resident State of the tax payer, and

- Tax in the third State on income of the PE is less than 60% of the tax in the resident

State

• No reservation / notification made by India

Article 10 - Anti-abuse rule for PE situated in third State

Some of the countries that have made reservation

• Singapore

• UK

• Canada

• France

In above cases, the

provision should not apply

Some of the countries that have not made any

reservation

• Netherlands

• Russia

Provisions would get added in

the Tax Treaty with India

36

Part IV: Article 12 to 15–Avoidance of Permanent Establishment Status

37

Artificial avoidance of PE

Text

ARTICLE 12(Agency PE)

ARTICLE 13(Preparatory/auxiliary activities)

ARTICLE 14(Installation PE /Service PE)

1 2 3

KEY IMPACT AREAS

Marketing support

arrangements by F Co. in

India

Agency arrangements in

India

Restricted exemptions for

preparatory and auxiliary

activities

Storage operations,

activities of liaison offices,

etc.

Artificial split-up of

contracts

Splitting-up of contracts

amongst multiple

entities

38

Article 12: Commissionaire / Market support arrangements

F Co.

Indian agent

Outside India

India

INDIAN CUSTOMERS

TYPICAL MARKET SUPPORT

ARRANGEMENT

Typical bouquet of market support

services rendered by Indian agents:

- Briefing customers

- Product demonstrations/ brochure

- Explaining product utility

- Communicating price/ price range

fixed by F Co.

- Resolving complaints

Scope of PE expanded to include agent playing principal role, leading to

routine conclusion of contracts, without material modification

Agent acting exclusively or almost exclusively on behalf of one or moreclosely related enterprises not to be considered independent

KEY CHANGES PROPOSED BY MLI

No reservations made by India

Likely rise in PE disputes – Imperative for corporates to mitigate risk through robust documentation

No agency PE, absent

authority to conclude

contracts

No PE if agent working for

multiple principles

CASE FOR ‘NO PE’ SO FAR CASE FOR ‘YES PE’ POST MLI

Substantive activities of agent leading

to contract conclusion, even if no

authority to conclude contracts

Multiplicity of closely related

principles to be viewed collectively for

ascertaining independence

Key treaties impacted Some countries that have made reservation

UK, Singapore, Cyprus, Canada,

Ireland, Australia, Luxembourg

Some countries that have not made reservation

Netherland, France, Japan,

Indonesia

39

Article 13: Restricted exemptions - Preparatory/auxiliary activities

TYPICAL EXEMPTIONS FOR PE UNDER VARIOUS

INDIAN TREATIES

No PE for F Co. in India if activities performed are

preparatory and auxiliary like:

a. Use of facilities for storage, display or

delivery of goods

b. Maintenance of stock of goods for the purpose

of storage, display and delivery

c. Maintenance of stock of goods for processing by

other enterprise

d. Maintenance of fixed place of business for

purchase of goods or collecting information

e. Maintenance of a fixed place of business for

other activities not listed above, if it is

preparatory or auxiliary

f. Maintenance of fixed place of business for any

combination of activities in (a) to (e) above, if

such overall activity is preparatory or auxiliary

Significant impact on ‘preparatory and auxiliary’ exemptions to F Co’s

Activities of F Co. need to be tested on individual, as well as

collective basis for meeting ‘Preparatory and auxiliary test’ [Option

A]

PE to be formed by disregarding fragmentation of cohesive business

operations whether :

- within entity; or

- within the group

KEY CHANGES PROPOSED BY MLISITUATION SO FAR

KEY IMPACT AREAS

Storage

operations

Liaison office

operations

Other non-core

business

operations

1 32

India adopts Option A

Key treaties impacted

JAPAN

INDONESIA

NETHERLANDS

RUSSIA

Key treaties not impacted

UK

CYPRUS

SINGAPORE

FRANCE

40

Article 14: Artificial splitting-up of contracts

Enhanced PE exposure for F Cos. undertaking long term construction/service contracts

F Co.TYPICAL

SPLITTING-UP

OF CONTRACT

• Turnkey contract given to F Co. by I Co.

• Contract split-up into several components

• Time spent on each contract less than

prescribed threshold

F Co. 2

PE to be formed by disregarding artificial splitting-up of

contracts between F Co. and its affiliates if:

- Installation activities performed by affiliates are connected to

F Co.’s activities; and

- Duration of each such activity (i.e. of F Co. as well as affiliates)

exceeds 30 days

KEY CHANGES PROPOSED BY MLI

Turnkey project

Outside India

India

22 months

Con

tra

ct-

I –

11

mo

nth

s

Con

tra

ct-

II –

11

mo

nth

s

F Co. 1

No reservations made by India

Some countries that have made reservation

UK, Singapore, Cyprus,

Canada, Japan, Luxembourg,

Sweden

Some countries that have not made reservation

Netherland, France, Australia,

Ireland, Indonesia, New Zealand

41

Part V: Article 16 & 17–Dispute Resolution

42

Article 16 and 17: Dispute Resolution

• Presentation of case to competent authority:

• Expresses reservation on presentation of case to either of the competent authorities – to

be presented by the taxpayer only in the country of its residence

• Time limit for presenting the case for MAP:

• Agrees with the model time limit of three years

• Extends time limit under Tax Treaties with shorter time limit e.g. Canada

• Adoption of Article 9(2) of OECD model convention:

• Agrees to adopt Article 9(2) through MLI

• Key countries aligned – France. Belgium, Swiss Confederation

• Key countries not aligned – Germany, China

KEY CHANGES PROPOSED BY MLI AND INDIA’S POSITION TO KEY CLAUSES

• Corresponding adjustments now possible with 27 countries subject to them including India

under Covered Tax Agreements and adopting article 9(2) through MLI

• Impetus in resolution of pending litigation especially with large trade partners

KEY IMPACT AREAS

43

Thank YouMonika Wadhani

Associate Director | International Tax and Regulatory

BSR & Associates LLP | 1st Floor | Lodha Excelus | Apollo Mills Compound | NM Joshi Marg | Mahalaxmi | Mumbai - 400011| India

Board +91 22 3989 6000Direct +91 22 3090 2830Fax +91 22 3983 2210Mobile +91 9920494385

mwadhani@kpmg.comDisclaimer:

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. The views contained in this presentation are personal in nature and should not be relied upon to form any opinion.

Although there is an endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

The views mentioned in this presentation are not binding on any authority or court, and so, no assurance is given that a position contrary to that expressed herein will not be asserted by any authority and ultimately sustained by an appellate authority or a court of law.