Double Taxation Avoidance Agreement Between Nepal And India

India and Nepal signed a revised Double Taxation Prevention (DBA) agreement on Sunday to encourage Indian investment in Nepal, prevent tax evasion and relax procedures for stakeholders with business interests in both countries. The treaty, which is based on modern fiscal principles and respects the current international environment, will replace the Convention on the Prevention of Double Taxation, signed in 1987. ASSOCIATED ENTERPRISES (a) a company of a contracting state directly or indirectly participates in the administration, control or capital of a company of the other State party, or b) to the same persons who directly or indirectly participate in the administration, control or capital of a firm of a contracting state and a company of the other State party. In both cases, conditions different from those that would be achieved between independent companies are imposed or imposed between the two companies in their commercial or financial relations, so that all profits that would have been generated by either company, but because of these conditions, are not generated in this way, are included in the profits of that business and are taxed accordingly. 1. Notwithstanding the remedies provided by the national law of those States, where a resident of the contracting state considers that the actions of one or two contracting states give rise to a imposition that does not comply with the provisions of this agreement, he may submit his case to the competent authority of the contracting state of which he is domiciled. In this case, the remedy that does not provide for taxation in accordance with the agreement is made public. 2. The competent authority asks, if the objection appears to be well founded and cannot reach an appropriate solution itself, to settle the care by mutual agreement with the competent authority of the other State party, in order to avoid taxation that is not in accordance with the agreement. Any agreement reached will be implemented in the national legislation of the States Parties, regardless of any restrictions. 3.

The competent authorities of the contracting states try to resolve by mutual agreement any difficulty or doubt about the interpretation or application of the convention. They can also work together to eliminate double taxation in cases that are not under the convention.