India has signed a double taxation avoidance agreement (DTAA) with Tanzania.
This agreement was signed in Dar es Salaam on Friday.
Mr K.V. Bhagirath, High Commissioner of India, signed on behalf of the Indian Government, and Mr Pereira Ame Silima, Deputy Minister of Finance, on behalf of Tanzanian Government in the presence of the Prime Minister, Dr Manmohan Singh, and the Tanzania President, Mr Kikwete.
The DTAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a permanent establishment in the source state. Examples of permanent establishment include a branch, factory, etc.
Profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for more than 270 days.