India, on Wednesday, signed the Double Taxation Avoidance Agreement (DTAA) with Latvia to prevent income tax evasion by entities in both countries, a move that is also expected to increase economic cooperation.

Latvia is the third Baltic country with which DTAA has been signed by India. The pacts have already come into force with Lithuania and Estonia.

DTAA provides that business profits will be taxable in the source country if the activities of an enterprise constitute a permanent establishment (PE) there, an official statement said. — PTI