Article 1 - Scope of the Convention - France - Convention to Implement Tax Treaty related Measures to Prevent Base Erosion and Profit Shifting

MINISTRY OF FINANCE (Department of Revenue) (INCOME TAX) NOTIFICATION NO. 57/2019 New Delhi, the 9th August, 2019 S.O. 2887(E).- Whereas the Multilateral Convention to Implement Tax Treaty related Measures to Prevent Base Erosion and Profit Shifting (hereinafter referred to as the the said Convention ) was signed by India at Paris, France on the 7th day of June, 2017; And whereas, the said Convention entered into force on the 01st day of July, 2018, being the first day of month following expiration of three calendar months beginning on the date of deposit of the fifth instrument of ratification, in accordance with para 1 of Article 34 of the said Convention; And whereas, India had ratified the said Convention and had deposited the instrument of ratification along-with the list of Covered Tax Agreements, reservations and notifications (hereinafter referred to as India s Position under the said Convention ) to the Depositary as in Article 39 of the said Convention, on the 25th day of June, 2019; And whereas, the date of entry into force of the said Convention for India is the 01st day of October, 2019, being the first day of the month following the expiration of a period of three calendar months beginning on the 25th day of June, 2019 being the date of deposit by India of the instrument of ratification, in accordance with para 2 of Article 34 of the said Convention; And whereas, the provisions of the said Convention shall have effect in India with respect to a Covered Tax Agreement in accordance with provisions of Article 35 of the said Convention; Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that the provisions of the said Convention shall be given effect to in the Union of India, in accordance with India s Position under the said Convention, as set out in the Annexure hereto. ANNEXURE MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY RELATED MEASURES TO PREVENT BASE EROSION AND PROFIT SHIFTING The Parties to this Convention, Recognising that governments lose substantial corporate tax revenue because of aggressive international tax planning that has the effect of artificially shifting profits to locations where they are subject to non-taxation or reduced taxation; Mindful that base erosion and profit shifting (hereinafter referred to as BEPS ) is a pressing issue not only for industrialised countries but also for emerging economies and developing countries; Recognising the importance of ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created; Welcoming the package of measures developed under the OECD/G20 BEPS project (hereinafter referred to as the OECD/G20 BEPS package ); Noting that the OECD/G20 BEPS package included tax treaty-related measures to address certain hybrid mismatch arrangements, prevent treaty abuse, address artificial avoidance of permanent establishment status, and improve dispute resolution; Conscious of the need to ensure swift, co-ordinated and consistent implementation of the treatyrelated BEPS measures in a multilateral context; Noting the need to ensure that existing agreements for the avoidance of double taxation on income are interpreted to eliminate double taxation with respect to the taxes covered by those agreements without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in those agreements for the indirect benefit of residents of third jurisdictions); Recognising the need for an effective mechanism to implement agreed changes in a synchronised and efficient manner across the network of existing agreements for the avoidance of double taxation on income without the need to bilaterally renegotiate each such agreement; Have agreed as follows: PART I. SCOPE AND INTERPRETATION OF TERMS Article 1 Scope of the Convention This Convention modifies all Covered Tax Agreements as defined in subparagraph a) of paragraph 1 of Article 2 (Interpretation of Terms).