India, Oman amend taxation pact for greater coordination; cut some tax rates
This story was originally published at 17:47 IST on 26 June 2025
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NEW DELHI – India and Oman have amended the bilateral double taxation avoidance agreement to facilitate greater coordination among relevant authorities of the two sides for efficient tax collection. Under the revised agreement, the two sides have also cut the withholding tax on royalties and technical services fees to 10% from 15%.
Governments of both the countries have introduced a principal purpose test in the agreement to prevent its abuse. Authorities of the two countries will not grant tax benefit if it is found that a transaction was made with the sole aim to obtain benefit of the agreement, according to the text of the revised double taxation avoidance agreement.
"The protocol's expanded provisions on information exchange and mutual assistance in tax collection underscore India's continued commitment to transparency and cross-border cooperation," said Sandeep Jhunjhunwala, M&A Tax Partner at Nangia Andersen LLP. "For enterprises engaged in cross-border transactions between the two jurisdictions, these developments reinforce the imperative of ensuring commercial substance and adherence to the underlying object and purpose of a tax treaty."
India and Oman had signed a protocol to amend the tax treaty in January. Commerce and Industry Minister Piyush Goyal had signed the protocol on his visit to Muscat. The double taxation avoidance agreement was implemented in 1997.
New Delhi and Muscat have also been engaged in negotiations for a Comprehensive Economic Partnership Agreement since 2023. India had a total bilateral trade of $10.62 billion with Oman in 2024-25 (Apr-Mar), which included exports worth $4.07 billion. End
US$1 = INR 85.71
Reported by Krity Ambey
Edited by Ashish Shirke
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