## Policy Analysis Report: Amendment to the Double Taxation Agreement between India and the Kyrgyz Republic
**1. Executive Summary:**
This report analyzes a notification from the Ministry of Finance, Department of Revenue, regarding an amendment to the Agreement between the Government of the Republic of India and the Government of the Kyrgyz Republic for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income. The amendment, formalized through a Protocol signed on June 14, 2019, primarily focuses on updating the provisions related to the exchange of information between the contracting states. Key changes involve replacing Article 26 of the original agreement with an updated framework for information exchange, aligning it with international standards for tax transparency. This report details these changes, their likely rationale, and potential impact on information sharing between the two countries.
**2. Introduction:**
This report provides an overview and analysis of the notification published in The Gazette of India regarding the amendment to the Agreement between the Government of the Republic of India and the Government of the Kyrgyz Republic for the avoidance of double taxation. The analysis is based solely on the provided text of the notification and its annexed protocol.
**3. Policy Overview:**
* This notification concerns an *amendment* to the existing "Agreement between the Government of the Republic of India and the Government of the Kyrgyz Republic for the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with respect to taxes on income signed at New Delhi on 13th April, 1999."
* **Core Objective:** Based on the text, the core objective of *this specific amendment* is to update and enhance the framework for the exchange of information between India and the Kyrgyz Republic, to aid in the administration and enforcement of domestic tax laws and to prevent fiscal evasion.
**4. Background and Rationale:**
* **Reason for Amendment:** The amendment seems to be motivated by the need to modernize and strengthen the existing information exchange mechanism to address contemporary challenges in combating international tax evasion and ensuring compliance with tax regulations. The replacement of Article 26 suggests that the original provisions were deemed insufficient or outdated in light of evolving international standards and best practices.
**5. Key Provisions / Changes:**
This section focuses specifically on the changes introduced by the amendment.
* **Specific Part of Original Policy Changed:** Article 3(g)(ii) and Article 26 of the original agreement are being changed. Specifically Article 26 is being replaced entirely.
* **New Rule/Provision:**
* **Article 1**: "Subparagraph ii of paragraph g of Article 3 of the Agreement shall read as follows: in Kyrgyz Republic, the Ministry of Economy or its authorized representative."
* **Article 2**: The *new* Article 26 outlines a comprehensive framework for the exchange of information, including documents, between the competent authorities of India and the Kyrgyz Republic. Key aspects of the new Article 26 include:
* Mandating the exchange of information foreseeably relevant for carrying out the agreement or for administering/enforcing domestic tax laws.
* Requiring that received information be treated as confidential.
* Specifying the permissible uses of the information (assessment, collection, enforcement, prosecution, appeals, oversight).
* Establishing limitations on the obligation to provide information, such as measures at variance with laws or administrative practices, unobtainable information, or information that would disclose trade secrets or be contrary to public policy.
* Stating that a contracting state cannot decline to supply information solely because it has no domestic interest in such information or because the information is held by a bank or other financial institution.
* **Difference/Effect of the Change:** The new Article 26 likely provides a more detailed and robust framework for information exchange than the original version. It clarifies the scope of information that can be exchanged, the procedures for doing so, and the limitations on the obligation to provide information. This strengthens the ability of both countries to combat tax evasion and ensure compliance.
**6. Target Audience and Stakeholders:**
Based on the provided text, the following are directly affected by this amendment:
* Tax authorities and administrations of both India and the Kyrgyz Republic.
* Taxpayers in both countries who may be subject to information requests from the other country.
* Financial institutions and other entities that may be required to provide information to tax authorities.
**7. Implementation Aspects (Inferred):**
* **Responsible Agencies/Bodies:** The "competent authorities" of both Contracting States, likely the respective tax authorities. In Kyrgyz Republic the "Ministry of Economy or its authorized representative"
* **Timelines/Procedures:** The Protocol entered into force on October 22, 2020, after both countries notified each other of the completion of required legal procedures. The specific procedures for requesting and providing information are not detailed in the provided text, but would likely be governed by domestic laws and administrative practices.
**8. Expected Outcomes / Impact of Changes:**
* **Likely Intended Outcome of Changes:** The intended outcome of the amended Article 26 is to improve the effectiveness of information exchange between India and the Kyrgyz Republic, leading to:
* Enhanced detection and prevention of international tax evasion.
* Improved compliance with tax laws in both countries.
* Greater transparency in cross-border financial transactions.
* More effective administration and enforcement of tax regulations.
**9. Conclusion:**
The amendment to the Double Taxation Agreement between India and the Kyrgyz Republic, as detailed in the provided notification and protocol, represents a significant step towards strengthening cooperation in tax matters. The updated provisions for information exchange, particularly the replacement of Article 26, are likely to enhance the ability of both countries to combat tax evasion and ensure compliance. This amendment aligns with international efforts to promote tax transparency and cooperation and is expected to have a positive impact on the effectiveness of tax administration in both India and the Kyrgyz Republic.
Key Entities Referenced
New Delhi: Place where the notification and original agreement were signed; capital of India.
INCOME TAX: Subject of the notification, relating to amendments in taxation agreements.
Republic of India: One of the parties in the agreement for avoidance of double taxation.
Kyrgyz Republic: One of the parties in the agreement for avoidance of double taxation.
Agreement between the Government of the Republic of India and the Government of the Kyrgyz Republic for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income: The original agreement that is being amended by the protocol.
Bishkek, Kyrgyz Republic: Place where the amending protocol was signed.
13th April, 1999: Date when the original agreement between India and the Kyrgyz Republic was signed in New Delhi.
14th June, 2019: Date when the amending Protocol was signed in Bishkek, Kyrgyz Republic.
22nd October, 2020: Date of entry into force of the amending Protocol.
Incometax Act, 1961: Indian law under which the Central Government is exercising its powers to notify the amending Protocol.
Central Government: The government entity that is issuing the notification to implement the amending Protocol in the Union of India.
Union of India: The territory where the amending Protocol shall have effect.
Ministry of Economy: Government entity in Kyrgyz Republic, or its authorized representative.
RAJESH KUMAR BHOOT: Jt. Secy. who signed the notification.
Government of India Press, Ring Road, Mayapuri, New Delhi110064: Place where document was printed
रजजस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
xxxGIDHxxx
सी.जी.-डी.एxलxx.G-अID.E-x0x8x1 22021-231710
CG-DL-E-08122021-231710
असाधारण
EXTRAORDINARY
भाग II—खण्ड 3—उप-खण्ड (ii)
PART II—Section 3—Sub-section (ii)
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 4720] नई ददल्ली, बधु िार, ददसम्ब र 8, 2021/अग्रहायण 17, 1943
No. 4720] NEW DELHI, WEDNESDAY, DECEMBER 8, 2021/AGRAHAYANA 17, 1943
जित्त मत्रं ालय
(राजस्ट्ि जिभाग)
अजधसचू ना
नई ददल्ली, 8 ददसम् बर, 2021
(आयकर)
का.आ. 5094(अ).—जबदक, आय पर करों के संबंध म ें दोहरे कराधान का पररहार करने और राजकोषीय
अपिंचन रोकने के जलए भारत गणराज्य क सरकार तथा दकरजग़ गणराज्य क सरकार के बीच एक करार के
संिोधनकारी प्रोटोकॉल (जजसे इसके बाद कजथत सिं ोधनकारी प्रोटोकॉल कहा गया ह)ै पर नई ददल्ली म ें 13 अप्रलै , 1999
को हस्ट्त ाक्षर र दकए गए थ,े जैसा दक इस अजधसूचना के अनुबधं में ददया गया ह,ै उस पर जबश्केक, दकरजग़ गणराज्य म ें
14 जून, 2019 को हस्ट्ताक्षर र दकए गए ह;ैं
और जबदक, उक्त संिोधनकारी प्रोटोकॉल के प्रिृत्त होने क तारीख 22 अक्तूबर 2020 है, जो दक कजथत संिोधनकारी
प्रोटोकॉल के अनुच्छेद 3 के अनुसार, कजथत संिोधनकारी प्रोटोकॉल को लाग ू करने के जलए संबंजधत कानूनों के वारारा यथा
अपेजक्षर त प्रदियाएं पूरी करन े के बाद अजधसूचनाओं में से बाद क अजधसूचना क जतजथ ह।ै
इसजलए, अब, आयकर अजधजनयम, 1961 (1961 का 43) क धारा 90 क उपधारा (1) वारारा प्रदत्त िजक्तयों का प्रयोग
करते हुए, केन्द्रीय सरकार एतद्द्वारा अजधसूजचत करती ह ै दक इसके साथ संलग्न कजथत संिोधनकारी प्रोटोकॉल के सभी
उपबंध भारत संघ म ेंलागू होंगे।
7147 GI/2021 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
अनबु धं
आय पर करों के सबं धं म ेंदोहरे कराधान के पररहार तथा राजकोषीय अपिचं न को रोकन ेके जलए भारत गणराज्य क सरकार
तथा दकरजग़ गणराज्य क सरकार के बीच करार जजस पर नई ददल्ली म ें 13 अप्रलै , 1999 को हस्ट्ताक्षर र दकए गए थ,े का
सिं ोधनकारी प्रोटोकॉल।
भारत गणराज्य क सरकार तथा दकरजग़ गणराज्य क सरकार,
आय पर करों के संबंध म ें दोहरे कराधान के पररहार तथा राजकोषीय अपिंचन को रोकन े के जलए भारत गणराज्य क
सरकार तथा दकरजग़ गणराज्य क सरकार के बीच करार (जजसे इसके बाद “करार” कहा गया ह)ै , जजस पर नई ददल्ली म ें
13 अप्रलै , 1999 को हस्ट्ताक्षर र दकए गए थ,े को संिोजधत करन े क इच्छ ा स,े
इस प्रकार सहमत हुई ह:ैं
अनच्ु छेद 1
करार के अनच्ु छेद 3 के अनुच्छेद (छ) के उप-पैराग्राफ़ (ii) को जनम्नानुसार पढा जाएगा:
"दकरजग़ गणराज्य म,ें अथथव्यिस्ट्था मंत्रालय या उसके प्राजधकृत प्रजतजनजध"
अनच्ु छेद 2
करार के अनच्ु छेद 26 को जनम्नजलजखत से प्रजतस्ट्थाजपत दकया जाएगा
“अनच्ु छेद 26
सूचनाओं का आदान-प्रदान
1. संजिदाकारी राज्यों के सक्षर म प्राजधकारी ऐसी सूचना (दस्ट्तािेजों अथिा दस्ट्तािेजों क अजधप्रमाजणत प्रजतयों
सजहत) का आदान-प्रदान करेंग े जो दक इस करार के उपबंधों को अथिा संजिदाकारी राज्यों अथिा उनके राजनैजतक उप-
प्रभागों अथिा स्ट्थानीय प्राजधकरणों क ओर स े लगाए गए प्रत्येक प्रकार एि ं जििरण के करों के संबंध में घरेल ू कानूनों के
प्रिासन अथिा प्रितथन को दियाजन्द्ित करने के जलए अनुमानत: सगं त हैं, जहां तक दक उनके अधीन कराधान व्यिस्ट्था इस
करार के प्रजतकूल नहीं ह।ै सूचनाओं का आदान-प्रदान अनच्ु छेद 1 और 2 वारारा प्रजतबंजधत नहीं ह।ै
2. संजिदाकारी राज्य वारारा पैराग्राफ 1 के अंतगथत प्राप्त क गई कोई सूचना उस संजिदाकारी राज्य के आंतररक काननू ों
के अंतगतथ प्राप्त सूचना के समान ही गुप्त समझी जाएगी और उसे केिल उन व्यजक्तयों अथिा प्राजधकाररयों (न्द्यायालय और
प्रिासजनक जनकाय िाजमल ह)ैं को प्रकट दकया जाएगा जो परै ाग्राफ 1 में उजल् लजखत करों के संबंध में करों के जनधाथरण
अथिा उनक िसूली करन,े उनके प्रितथन अथिा अजभयोजन के संबंध में अथिा अपीलों का जनधाथरण करन े या उपयुथक्त क
चूक से संबद्ध हों। ऐसे व् यजक्त अथिा प्राजधकारी केिल ऐसे प्रयोजनों के जलए सूचना का उपयोग करेंगे। िे इस सूचना को
सािथजजनक न्द्यायालय क कायथिाजहयों अथिा न्द्याजयक जनणथयों में प्रकट कर सकेंगे। भल े ही पूिोक्त सूचनाओं में कुछ भी
कहा गया हो, दकसी संजिदाकारी राज्य वारारा प्राप्त क गई सचू नाएं दसू रे प्रयोजनों के जलए प्रयोग क जा सकती हैं, यदद
ऐसी सूचनाओं का प्रयोग दोनों संजिदाकारी राज्य ों के कानूनों के तहत ऐस े आन्द्य प्रयोजनों के जलए दकया जा सकता हो तथा
आपूर्ततकताथ संजिदाकारी राज्य के सक्षर म प्राजधकारी ऐसे प्रयोग के जलए प्राजधकृत करते हों।
3. दकसी भी जस्ट्थजत में पैराग्राफ 1 और 2 के प्रािधानों का अथ थ दकसी संजिदाकारी राज्य के सक्षर म प्राजधकारी पर
जनम्नजलजखत दाजयत्ि डालना नहीं होगा:
(क) उस अथिा दसू रे संजिदाकारी राज्य के कानूनों अथिा प्रिासजनक प्रथा से हटकर प्रिासजनक उपाय करना;
(ख) ऐसी सूचना (जजसमें दस्ट्तािेजों क अजधप्रमाजणत प्रजतयां िाजमल ह)ैं क आपूर्तत करना जो उस अथिा दसू रे
संजिदाकारी राज्य के कानूनों के अंतगथत अथिा प्रिासन क सामान्द्य जस्ट्थजत में प्राप्त नहीं है;
(ग) ऐसी सूचनाओं क आपूर्तत करना जजससे कोई व्यापार, कारोबार, औद्योजगक, िाजणजज्यक अथिा व्यािसाजयक भेद
अथिा व्यापार प्रदिया, अथिा सूचना प्रकट होती हो, जजसको प्रकट करना सािथजजनक नीजत के प्रजतकूल हो।
4. इस अनुच्छेद के अनुसरण में यदद दकसी संजिदाकारी राज्य वारारा दकसी सूचना का अनुरोध दकया गया हो, तो
दसू रा संजिदाकारी राज्य अनुरोध क गई सूचना प्राप्त करने के जलए अपन े सूचना एकत्र करने िाले उपायों का उपयोग
करेगा, भले ही दसू रे राज्य को अपने स्ट्ियं के कर प्रयोजनों के जलए ऐसी सूचना क आिश्यकता न हो। जपछले िाक्य म ें
अन्द्तर्तनजहत दाजयत्ि पैराग्राफ 3 क सीमाओं के अधीन है, दकन्द्तु दकसी भी जस्ट्थजत में ऐसी सीमाओं का यह अथथ नहीं होगा
दक संजिदाकारी राज्य केिल इसजलए सूचना क आपूर्तत करने से मना करते ह ैं दक ऐसी सूचना में उसका कोई आंतररक जहत
नहीं ह।ै[भाग II—खण् ड 3(ii)] भारत का राजपत्र : असाधारण 3
5. दकसी भी जस्ट्थजत में पैराग्राफ 3 के प्रािधानों का अथ थ केिल इसजलए सूचना क आपूर्तत करन े से मना करन े के जलए
दकसी संजिदाकारी राज्य को अनुमजत देने के जलए नहीं लगाया जाएगा दक िह सूचना दकसी बैंक, अन्द्य जित्तीय संस्ट्थान,
दकसी एजेंसी या दकसी न्द्यासी क्षर मता म ें कायथरत नाजमती या व्यजक्त के पास ह ै या यह दकसी व्यजक्त के स्ट्िाजमत्ि जहत स े
संबंजधत ह”ै ।
अनच्ु छेद 3
प्रिृजत्त
दोनों संजिदाकारी राज्य राजनजयक माध्यमों स े जलजखत रूप म ेंएक-दसू रे को अजधसूजचत करेंग ेदक उन्द् होंन े इस प्रोटोकॉल को
लाग ू करन े के जलए अपने-अपने कानूनों के अतं गतथ अपेजक्षर त प्रदियाएं पूरी कर ली ह।ै यह प्रोटोकॉल ऐसी अजधसूचनाओं म ें स े
बाद क अजधसूचना क तारीख से प्रिृत् त होगा।
उसके साक्ष्य में, अधोहस्ट्त ाक्षर री, जोदक जिजधित प्राजधकृत ह,ैं ने इस प्रोटोकॉल पर हस्ट्ताक्षर र दकए ह ैं जोदक इस करार का
अजभन्न अगं होगा।
जबिकेक में 14 जून 2019 तारीख को जहन्द्दी, दकरजग़ , रूसी और अग्रं ेजी में दो मलू प्रजतयों में जनष्पाददत, सभी पाठ समान
रूप से प्रामाजणक। दकसी जभन्नता क जस्ट्थजत म,ें अंग्रेजी पाठ प्रभािी माना जाएगा।
भारत गणराज्य क दकरजग़ गणराज्य क
सरकार क ओर स े सरकार क ओर स े
[अजधसूचना स.ं 135/2021/फा. सं. 503/07/95-जि.क.प्र.-II]
राजेि कुमार भूत, संयुक्त सजचि
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 8th December, 2021
(INCOME TAX)
S.O. 5094(E).—Whereas, the Protocol, amending the Agreement between the Government of the
Republic of India and the Government of the Kyrgyz Republic for the avoidance of double taxation and for
the prevention of fiscal evasion with respect to taxes on income which was signed at New Delhi on 13th
April, 1999, has been signed at Bishkek, Kyrgyz Republic on 14th June, 2019, as set out in the Annexure
appended to this notification (hereinafter referred to as the said amending Protocol);
And whereas, the date of entry into force of the said amending Protocol is the 22nd October, 2020, being the
date of the later notification of the completion of the procedures required by the respective laws for the
entry into force of the said amending Protocol, in accordance with Article 3 of the said amending Protocol;
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 all the provisions of the said amending
Protocol, as annexed hereto, shall have effect in the Union of India.
ANNEXURE
Protocol amending the Agreement between the Government of the Republic of India and the
Government of the Kyrgyz Republic for the Avoidance of Double Taxation and for the Prevention of
Fiscal Evasion with respect to taxes on income signed at New Delhi on 13th April, 1999.
The Government of the Republic of India and the Government of the Kyrgyz Republic,
Desiring to amend the Agreement between the Government of the Republic of India and the Government of
Kyrgyz Republic for the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with
respect to taxes on income signed at New Delhi on 13th April, 1999 (hereinafter referred to as “the
Agreement”).
Have agreed as follows:4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
Article 1
Subparagraph (ii) of paragraph (g) of Article 3 of the Agreement shall read as follows:
“in Kyrgyz Republic, the Ministry of Economy or its authorized representative”.
Article 2
Article 26 of the Agreement shall be replaced by the following
“ARTICLE 26
EXCHANGE OF INFORMATION
1. The competent authorities of the Contracting States shall exchange such information (including
documents or certified copies of the documents) as is foreseeably relevant for carrying out the provisions of
this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind
and description imposed on behalf of the Contracting States, or of their political sub-divisions or local
authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of
information is not restricted by Articles 1 and 2.
2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that Contracting State and shall be
disclosed only to persons or authorities (including courts and administrative bodies) concerned with the
assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in
relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities
shall use the information only for such purposes. They may disclose the information in public court
proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting
State may be used for other purposes when such information may be used for such other purposes under the
laws of both Contracting States and the competent authority of the supplying Contracting State authorises
such use.
3. In no case shall the provisions of paragraph 1 and 2 be construed so as to impose on competent
authority of a Contracting State the obligation:
(a) to carry out administrative measures at variance with the laws or administrative practice of that or
of the other Contracting State;
(b) to supply information (including certified copies of documents) which is not obtainable under the
laws or in the normal course of the administration of that or of the other Contracting State;
(c) to supply information which would disclose any trade, business, industrial, commercial or professional
secret or trade process, or information, the disclosure of which would be contrary to public policy.
4. If information is requested by a Contracting State in accordance with this Article, the other
Contracting State shall use its information gathering measures to obtain the requested information, even
though that other State may not need such information for its own tax purposes. The obligation contained in
the preceding sentence is subject to the limitations of paragraph 3, but in no case shall such limitations be
construed to permit a Contracting State to decline to supply information solely because it has no domestic
interest in such information.
5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline
to supply information solely because the information is held by a bank, other financial institution, nominee
or person acting in an agency or a fiduciary capacity or because it relates to ownership interest in person”.
Article 3
ENTRY INTO FORCE
Both Contracting States shall notify each other in writing through diplomatic channels that they have
completed the procedures required by the respective laws for the entry into force of this Protocol. This
Protocol shall enter into force on the date of the later of such notifications.[भाग II—खण् ड 3(ii)] भारत का राजपत्र : असाधारण 5
In witness thereof, the undersigned, duly authorised thereto, have signed this Protocol which shall be an
integral part of the Agreement.
Done in duplicate at Bishkek on this 14th day of June 2019 in the Hindi, Kyrgyz, Russian and English
languages, all texts being equally authentic. In case of any divergence, the English text shall prevail.
For the Government of For the Government of
the Republic of India the Kyrgyz Republic
[Notification No. 135/2021/F. No. 503/07/95-FTD-II]
RAJESH KUMAR BHOOT, Jt. Secy.
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