The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval forsigning of an Agreement between India and Maldives for the avoidance of double taxation of income from international air transport.
The Agreement provides for relief from double taxation for airline enterprises of India and Maldives by way of exemption of income derived by the enterprise of India from the operation of aircraft in international traffic, from Maldivian tax and vice-versa. Under the agreement, profits from the operation of aircraft in international traffic will be taxed in one country alone.Accordingly the taxing right is conferred upon the country to which the enterprise belongs. The Agreement will provide tax certainty for airline enterprises of India and Maldives.
The Agreement further provides for Mutual Agreement Procedure for resolving any difficulties or doubts arising as to the interpretation or application of the Agreement.