It also eases norms for collaboration and talent sharing between the two nations.Under the provisions of the Double Taxation Avoidance Agreement, Australia had been charging tax under the head - ‘royalty’ - from Indian IT companies for offshore work done in India, though the same income was taxed in India as well. This had led to losses of almost $1 billion for the $220 billion IT industry over the last 10 years.IT industry captains applauded the move to end double taxation.“Thank you so much to the Govt of India and to Nasscom for resolving the critical and long-standing Australia tax issue. Super stoked and proud to see India and Australia lead the way!”According to estimates by the IT industry body, the Indian IT sector’s total annual revenues from the Australian market are about $2-$3 billion. About 50% of this business is estimated to be served through offshoring to India. Hereafter, unlike last time, even the tax department cannot appeal in Federal Courts as the complete domestic laws are getting amended.

Source: Economic Times April 04, 2022 18:07 UTC