India and France have signed an Amending Protocol to revise the India-France Double Taxation Avoidance Convention (DTAC). In a statement, the Finance Ministry informed that the Protocol was signed during the recent visit of French President Emmanuel Macron to India. It added that the Chairperson of the Central Board of Direct Taxes, Ravi Agrawal, inked the protocol with the Ambassador of France to India, Thierry Mathou. Under the amended provisions, full taxing rights on capital gains arising from the sale of shares will be granted to the country where the company is a resident.

The Amending Protocol also deleted the so-called Most-Favoured-Nation (MFN) Clause from the Protocol to the DTAC, thereby bringing to rest all issues relating to it. It also modified the definition of ‘Fees for Technical Services’ by aligning it with the definition in India US Double Taxation Avoidance Agreement. The Amending Protocol also updated the provisions on Exchange of Information and introduced a new Article on Assistance in Collection of Taxes, as per international standards.

This would enable and facilitate the seamless exchange of information and strengthen mutual tax cooperation between India and France. The changes introduced through the Amending Protocol will enter into effect subsequent to the completion of the internal procedures under the laws of both countries and subject to the terms agreed between the two countries.