has ended a decade-long tax dispute between the two countries, stopping liabilities to the Australian Taxation Office on profits earned by Indian companies for services performed by overseas-based employees.Prime Minister Scott Morrison and Trade Minister Dan Tehan
The situation with India had been complicated by a 2018 Federal Court decision in which some income not sourced domestically was deemed to have an Australian source. Instead of changing the existing tax treaty, the new free trade deal has Australia making a unilateral change to domestic law, giving up some taxing rights. As a result, India will have exclusive taxing rights over the relevant income.Deloitte tax partner David Watkins said the change had been included in side letters to the main deal.