India-France DTAC Amendment Signed
Analysis based on 12 articles · First reported Feb 23, 2026 · Last updated Feb 23, 2026
The amendments to the India-France Double Taxation Avoidance Convention will provide greater tax certainty to taxpayers and are expected to boost investment, technology, and personnel flow between India and France. While India gains more taxing rights on capital gains, the split dividend tax rate aims to attract French FDI, potentially leading to a reassessment of investment structures by French investors.
India and France have signed an Amending Protocol to revise the India-France Double Taxation Avoidance Convention (DTAC) of 1992. The protocol, signed by Ravi Agrawal and Thierry Mathou, grants India full taxing rights on capital gains from the sale of shares of resident companies. It also deletes the Most-Favoured-Nation (MFN) Clause, modifies dividend taxation to a split rate of 5% and 15%, and aligns the definition of 'Fees for Technical Services' with the India-US DTAC. Furthermore, the scope of 'Permanent Establishment' is expanded, provisions for Exchange of Information are updated, and a new Article on Assistance in Collection of Taxes is introduced. The protocol also incorporates provisions of the Base erosion and profit shifting (BEPS) Multilateral Instrument. These changes aim to update the DTAC to international standards, balance the interests of both nations, provide tax certainty, and strengthen economic ties by boosting investment and technology flow.
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