Taxsutra – Indian High Court holds MFN clause in India-Netherlands Protocol applicable from date of OECD membership; Approves lower dividend WHTMay-04-202
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An Indian state high court set aside withholding tax certificates of 10% and directed Revenue (the Indian income tax department) to issue fresh certificates at a lower rate of 5% on dividend payments from Indian subsidiaries to a Dutch parent.
It applied the principle of common interpretation and adopted the view expressed in a decree issued by the Kingdom of Netherlands clarifying that a beneficial rate of 5% in the India-Slovenia DTAA will be applicable to recipients of the Netherlands from the date on which Slovenia became an OECD member country, i.e. from 21 July 2010, although the India-Slovenia DTAA came into force on 17 February 2005.