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India and Macedonia have signed a new double taxation avoidance agreement (DTAA) that provides for among other things exchange of banking information for tax administration purposes.
This DTAA was signed by External Affairs Minister Salman Khurshid and Macedonia’s Foreign Minister Nikola Poposki here on Tuesday.
As per the new agreement, dividend, interest and royalty will be taxed in the source country and the rate of taxation will not exceed 10 percent.
Capital gains on securities will be taxed in the source country.
Business income will be also taxed in the source country if the taxpayer has a permanent establishment there.
The DTAA also has a ‘limitation of benefit’ clause to prevent any misuse of treaty benefits.
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