Overview of Cabinet approval with foreign countries on February 12, 2020

The Cabinet Committee on Economic Affairs(CCEA) chaired by the Prime Minister(PM) Shri Narendra Modi approved the following pacts/agreements with the foreign countries on February 12, 2020. The approval in detail are as follows,Approval for MoU b/w India & Iceland for sustainable development in fisheries
The Union Cabinet has approved the Memorandum of Understanding (MoU) between India and Iceland in the field of sustainable fisheries development. This MoU was signed by India and Iceland on September 10, 2019.

Features of MoU:

i.The MoU envisages exchange of scientific and technical experts in the entire offshore and deep sea fishing area and in particular the facilities for their appointment at the right places.

ii.It also provides for the training of fisheries professionals in the field of modern fisheries management and processing and sharing of information and other information from scientific studies and research in the field of fisheries.

iii.The MoU calls for exchange of experts and expertise to explore the possibilities of processing and marketing fish products from the deep seas for entrepreneurship development.

iv.This MoU will further strengthen the friendly relations between India and Iceland and deal with bilateral issues in the fisheries sector as well.

Approval for amendment of agreement with Sri Lanka on double taxation, financial evasion prevention
The Union Cabinet gave its nod for signing and ratification of the protocol to amend the DTAA (Double Taxation Avoidance Agreement) between India & Sri Lanka for the avoidance of double taxation and the prevention of financial evasion in relation to taxes on income.

Key Points:

i.The DTAA has made a general anti-abuse provision. Such tax rules will help in curbing the tax planning tips taking advantage of loopholes and discrepancies. Significantly, the existing DTAA between India and Sri Lanka was signed on 22 January 2013 and the treaty was signed on 22 October, 2013. 2013 came into force.

ii.Both India & Sri Lanka are members of OECD(Organisation for Economic Co-
operation and Development), G20(Group of 20), BEPS(Base erosion and profit
shifting), hence they are required to implement the minimum standards based on Multilateral Convention to Implement Tax Treaty related measures to Prevent Base Erosion and Profit Shifting(MLI).

iii.India is a signatory to MLI. Sri Lanka is yet to sign the MLI. Hence the Principal Purpose Test (PPT) to update the amendment proposal in the India-Sri Lanka DTAA and to meet the minimum standards regarding treaty misuse under Act-6 of G-20 OECD basis tax evasion and benefit transfer (BEPS) project including provisions bilaterally.

About Iceland:
Capital– Reykjavík
Currency– Icelandic króna
President– Guðni Th. Jóhannesson
Prime Minister– Katrín Jakobsdóttir

About Sri Lanka:
Capital– Sri Jayawardenepura Kotte.
Currency– Sri Lankan rupee (LKR)
President– Gotabaya Rajapaksa
Prime Minister– Mahinda Rajapaksa