India-Sri Lanka double taxation avoidance pact strengthened

Changes will enable the government to blunt tax evasion

The double taxation avoidance agreement between India and Sri Lanka was amended on Wednesday, an official press release has announced.

“The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Signing and Ratification of the Protocol amending the Agreement between India and Sri Lanka for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,” an official press note said.

The amendment was made to the India-Sri Lanka Double Taxation Avoidance Agreement (DTAA) of 2013 and the new changes would enable the government to blunt tax evasion.

The changes made on Wednesday include amendments in the text of the preamble of the agreement and inclusion of Principal Purpose Test, a general and anti-abuse provision in the Double Taxation Avoidance Agreement.

The DTAA was signed on January 22, 2013 and became effective on October 22, 2013.