TIL Desk/Business/New Delhi/ In a major relief to Indian information technology (IT) companies operating in Australia, Canberra has agreed to amend its domestic laws to stop taxing offshore income of such Indian companies, as part of the free trade deal inked. This may lead to savings up to $200 million each year for over 100 Indian IT companies operating in Australia.
“The Government of Australia has agreed to amend the domestic taxation law to stop the taxation of offshore income of Indian firms providing technical services to Australia. “This will resolve the issue that the Indian government has raised about the double taxation avoidance agreement (DTAA) between the two governments for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,” said a commerce ministry official.
However, both the trade deal and changes to domestic Australian tax laws will come into effect once the Australian Parliament ratifies the deal after the general elections due in May are completed in Australia. DTAAs are tax treaties signed between two or more countries to help taxpayers avoid paying double taxes on the same income earned from the source country, as well as the residence country.
