The agreement was signed by Finance Minister Barsha Man Pun and his Indian counterpart Pranab Mukharjee in the presence of the Prime Minister Dr Baburam Bhattarai at Singha Durbar. [break]
Though the agreement was originally scheduled to be signed during the prime minister´s India visit in October, the signing had been postponed as some points were added during final negotiations in New Delhi.
Now India has become the tenth country to sign DTAA with Nepal. Norway, Thailand, Sri Lanka, Mauritius, Austria, Pakistan, China, South Korea and Qatar have already inked such agreement with Nepal. Similarly, India has already signed similar agreements with 81 countries.
Mukherjee, who landed in Katmandu on Sunday morning for a daylong visit, had reached directly to the Ministry of Finance (MoF) from the Tribhuvan International Airport and held talks with Finance Minister Pun and other senior officials before heading for prime minister´s office where the agreement was signed. Indian Foreign Secretary Ranjan Mathai had arrived in the capital on Saturday to make preparations for Mukherjee´s visit.
The DTAA will come into effect from the new fiscal years of the two countries.
Speaking on the occasion Finance Minister Pun said the pact will pave the way for tax stability for the residents of both the countries and facilitate mutual economic cooperation as well as open new avenues for investments and transfer of technology.
As per the newly-signed agreement, those involved in trading between the two countries will be liable to pay the differential income tax amount to the country where the tax rate is higher.
“Such provision will help boost the overall business and investment climate in Nepal,” said Pun. Finance Minister Pun further added that the agreement has also incorporated the provision of exchange of tax-related information as per the provision of the Organization for Economic Cooperation and Development (OECD).
Indian Finance Minister Mukherjee said the agreement envisages the effective exchange of information, and mutual cooperation in collection of taxes. “In the area of exchange of information, the revised DTAA provides for internationally accepted standards including sharing of bank information and sharing of information without domestic tax interest,” added Mukharjee.
Stating that India has already waived additional duty of customs for 117 items Mukherjee expressed readiness to discuss with Nepal about waiving duty for additional 100 items as demanded by Nepal.
Mukherjee said the Joint Economic Commission (JEC) meeting scheduled to be held in February 2012 will further widen opportunities for exploring new sectors of cooperation.
However, Purshottam Ojha, secretary at the Ministry of Commerce and Supplies, said India has yet to waive additional duty of customs for 162 Nepali items out of the total 331, for which Nepal sought duty waiver in 2007.
Related story
Ink & Insights Pvt. Ltd. celebrates 50th episode with globally...
