South Korea, India agree to upgrade FTA, revise DTA
20 January 2014
Posted by: Author: Mary Swire
Author: Mary Swire (Tax-News.com)
During a meeting on January 16 in New Delhi between South Korean President Park Geun-hye and India's Prime Minister Manmohan Singh, the two leaders agreed to upgrade their comprehensive economic partnership agreement (CEPA) and put into effect the revised double taxation agreement (DTA) between the two countries as soon as possible.
Given the potential for economic cooperation between India and South Korea, the two leaders agreed, in a joint statement, to make efforts to expand and deepen the bilateral economic relationship.
In that regard, both sides were said to share the view that there is a need to increase trade in goods and services, and investment, between the two countries. While it was confirmed that the CEPA has contributed to enhancing such total trade and investment flows, the two leaders reaffirmed the need for an upgrading of the trade treaty and agreed to make every effort to complete the process at the earliest date.
The CEPA was originally signed in 2009, and went into effect in 2010. It has, however, been recognized that its terms are worse than other trade treaties subsequently completed by both South Korea and India. It has been indicated that its scope is now planned to be widened to take in up to 90 percent of goods subject to tariffs, an increase from the current 75 percent.
To this end, it is planned that the trade ministers of both countries will meet in the first half of this year in Seoul.
In addition, the two leaders welcomed the fact that a revised DTA has now been initialled, and agreed to take the steps necessary to ratify and put it into effect at an early date. In order to provide a more favorable environment for investors from both countries, the revisions to the DTA are said to include lower withholding taxes, transfer pricing through mutual agreement procedures and the exchange of tax-related information.
This article was first published on Tax-News.com.