India

India

December 12, 1999 | By Keith Martin in Washington, DC

India continued its assault on foreigners who invest in India via treaty countries. The Authority for Advance Rulings denied benefits under the tax treaty with Oman on grounds that Omani residents are not subject to income taxes in Oman. A person must be a “tax resident” of a treaty country in order to qualify for benefits. In a separate action, the Indian government said it is reducing withholding taxes on dividends paid to Dutch residents from 15% to 10%. The change is retroactive to April 1, 1997. India was required to make the change because of a “most-favored-nation clause” in the Dutch tax treaty.