India, Serbia-Montenegro ink tax-avoidance pact

The moderate tax rates will be in line with the recent treaties to promote bilateral trade and investment.

India on Wednesday signed a double tax avoidance convention with Serbia and Montenegro -- the former Yugoslavia -- which provides for moderate rates of taxes on certain categories of income.

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The moderate tax rates will be in line with the recent treaties between the two countries to promote bilateral trade and investment, an official statement said.

The convention -- to be implemented soon -- will cover income tax, surcharges and wealth tax in the case of India, and profit tax, income tax, capital tax and revenue tax on overseas transport in the case of Serbia and Montenegro.

Finance Minister P Chidambaram signed the pact on behalf of India, while Serbia and Montenegro's International Economic Relations Minister Prof Predrag Ivanovic inked it on behalf of the European country.

Apart from providing for avoidance of double taxation, the convention also calls for exchange of information and an agreement on procedures to resolve any issue regarding its application.

India has double taxation avoidance agreements with 69 countries.