Reconstructing the Treaty Network - India Branch Report, IFA 2020 Cancun

This report was drafted with a focus on India for IFA's general report on the same subject and was published by IFA in July 2020 as part of the 'Cahiers de Droit Fiscal International' No. 105a in connection with 2020 IFA Congress in Cancun, Mexico. India has actively participated in the Base Erosion and Profit Shifting (‘BEPS') initiative and its positions have shaped the outcome in some areas of contention. Being largely a source state from where foreigners derive income on which India can collect only limited tax, especially due to the operation of double tax avoidance treaties, India has been sensitive to cases where benefits arising from bilateral treaties are claimed by parties belonging to third countries which leads to the erosion of the Indian tax base. That India embraced the BEPS Project whole-heartedly is evident from its adoption of most of the BEPS countermeasures contained in the Multilateral Instrument (“MLI”). Its reservations and opt-outs are consistent with its policies and practices. The effect of these positions (by India and its treaty partners) is discussed in this Branch Report