India today signed an agreement with Mexico to avoid double taxation (DBAA) to avoid double taxation and prevent income tax evasion. This agreement comes into force at a fortuitous date. The agreement also aims to promote economic cooperation between the two countries. The agreement was signed by Shri P. Chidambaram, The Union`s Minister of Finance, on behalf of the Indian government, and Patricia Espinosa Cantellano, Mexico`s Minister of Foreign Affairs, on behalf of the Mexican Government of the United States. In the current situation where there is economic instability in the market, this is a major setback for investors, where each country is trying to create a friendly market for investment and where judgments like AAR will remove investors from the country. First, the effects of such an order are expected to be colossal. Investors were protected under the grandfather`s general rule, i.e. investments before April 1, 2017, will not be taxable, but after changing the rules of the agreement between the Government of the Republic of India and the Government of Mauritius to avoid double taxation, exit plans have been strengthened2. The impact would also be visible in the process, as there is considerable uncertainty about the resignations of private equity firms and the DBAA signed by India with Mauritius.
This is not the first time AAR has ruled against the normal course of the contract. On a few occasions, it has been found that investors and companies derive their money from Mauritius and Singapore, primarily to take advantage of DTAA`s advantage between India and Mauritius. We advise you to check the list regularly. Indeed, India is reviewing its DBAA agreements with many countries that could soon be amended. Mexico has agreements with Canada and Spain on the entirety of social security. An agreement with the United States was signed, but it did not complete the entire approval process. The DBAA provides for the taxation of dividends, interest, royalties and royalties for technical services, both in the country of residence and in the country of origin. The effects of double taxation are avoided by granting one country the taxes paid by its inhabitants in the other country. Suppose you have a TDS that is deducted from 30.6% on your NGO applications. You must apply to your bank and file a number of documents such as a valid visa, an account statement in the country of your residence, etc.