“Synthesized text” is a document containing the consolidated text of the provisions of a Double Tax Avoidance Agreement (DTAA) and the Multilateral Instrument (MLI), as applicable to that DTAA.
This text has been issued by the Indian Government after joint consultation with the Government of the United Arab Emirates (UAE). It has been prepared pursuant to reservations and notifications regarding the MLI position submitted to the OECD depository by the UAE and India on 29 May 2019 and 25 June 2019 respectively, after completion of the ratification procedure by both countries.
The sole purpose of the synthesized text is to facilitate an understanding and consistent interpretation of the impact of MLI to the UAE – India DTAA.
It should however be noted that the text does not constitute a source of law, i.e. for legal purposes. The provisions of the MLI must be read alongside the DTAA.
(i) Prevention of treaty abuse
(ii) Increased time limit for Mutual Agreement Procedure (MAP)
(iii) Corresponding adjustment relief
Among the changes to the DTAA, the most significant change is the inclusion of PPT. Consequently, every UAE-based entity should assess whether its principal purpose is aligned with its functional profile. This gains further significance in light of the recently introduced substance requirements as well as the Country-by-Country Reporting rules in the UAE. These developments, combined with changes to the DTAA, are part of UAE’s commitment to adhere to the minimum standards relating to Base Erosion and Profit Shifting issued by the Organisation for Economic Co-operation and Development.
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