Colombia and India signed an agreement Friday to prevent tax evasion, money laundering and other tax-related offenses, reported Indian media.
The Double Taxation Avoidance Agreement (DTAA) is aimed at facilitating bilateral economic cooperation and will help to deal with income tax evasion, reported The Economic Times of India.
The accord was signed by Juan Alfredo Pinto, Colombian Ambassador to India, and Sudhir Chandra, chairman of India’s Central Board of Direct Taxes.
Under the agreement, dividends, interest and royalties in the two countries will be taxed in the country of a business’ residence, as well as the country the money is coming from.
The DTAA will also allow for the effective exchange of information, including banking data and tax collection cooperation between the tax authorities of the two countries.
Ambassador Pinto said of the decision that, “There are over 20 Indian firms operating in Colombia that have been waiting for this decision, as well as two Colombian firms which will benefit.”
He added that over the next year and a half, 10 more Indian businesses are expected to begin operations in Colombia.