In the first nine months of 2018-19, India had received $2.95 billion in foreign investment from the Netherlands, or $2.8 billion in investment in 2017-18 6 6 6 6 6 18 66 billion dollars. The Indian government wants to broaden its tax base by ensuring that stock transactions with Indian companies are not exempt from taxation in India. (d) If he is a national of both States or of one of the two States, the competent authorities of the States shall decide by mutual agreement on the matter. 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is unable to find a satisfactory solution itself, to resolve the case by mutual agreement with the competent authority of the other State with a view to tax evasion which is not in conformity with the Agreement. Any agreement reached shall be implemented in the domestic law of States, regardless of the time limits. Under the Agreement on the Prevention of Double Taxation and the Prevention of Tax Evasion with the Netherlands, investments by Dutch companies in the sale of shares in Indian companies are currently exempt from capital gains. (4) In India, double taxation is eliminated as follows: in both cases, conditions different from those which would be achieved between independent undertakings are imposed or taxed between the two undertakings in their commercial or financial relations, and then all profits which, without those conditions, would have been paid to one of the undertakings; however, under those conditions, were not created in this way, in which the profits of that undertaking may be included and taxed accordingly. Recently, Indian companies have seen their investments increase from companies of Dutch origin. An Indian government official was reported to have said: “We are in talks with the Netherlands to amend the agreement, particularly on issues relating to the taxation of capital gains. But we can`t predict the outcome right now. 5. Enterprises of a State the capital of which is whose capital is whote or partly owned or controlled by one or more residents of the other State may not be subject in the first-mentioned State to a tax or requirement which is different or more onerous than the taxation and related requirements to which other similar enterprises of the first state. India`s amendment Tax treaties, because what was supposed to prevent the taxation of the same income in both countries had raised concerns that, in many cases, the investment had led to a situation in which a company had escaped taxation in both countries.
f. `company` means any natural or legal person treated as a company or a legal person in accordance with the tax law applicable in the States concerned; Investors who pass through the Netherlands benefit from a favourable capital gain regime compared to those who come from Mauritius, Singapore or Cyprus. However, the need for economic substance in the Netherlands is higher than in many other low-tax areas,” said Amit Maheshwari, a partner at Ashok Maheshwary and Associates Llp. A company`s “economic substance” requirement must ensure that the benefits of the tax treaty go only to legitimate investors. Tax officials consider investment vehicles that have no economic activity in the country of origin as instruments of tax evasion and abuse of tax treaties. 9. If the amount of interest resulting from a special relationship between the payer and the beneficial owner or between both and another person, taking into account the claim for which it is paid, exceeds the amount agreed by the payer and the beneficial owner without such a relationship, this Article shall apply only to the latter amount. . . .