The terms ‘treaty shopping’ and ‘round tripping’ is often seen in the news with respect to capital inflows into a country. In this context consider the following statements:
1. An Indian national investing in India indirectly by channelizing the investments through Singapore to make use of a ‘treaty’ that India has with Singapore is called Treaty Shopping.
2. An American national investing in India indirectly by channelizing the investments through Singapore is called as Round Tripping.
3. Treating Shopping and Round Tripping are one and the same.
Which of the statements given above is/are incorrect?
1 only
1 and 2 only
3 only
1, 2 and 3
• India has a Double Taxation Avoidance Agreement with a number of countries in order to avoid taxing the income of Indian nationals residing in these countries twice. However, some countries, which are often called as ‘taxen havens’, have very low or no taxes, which is exploited by a number of investors.
• These investors can be investors from other countries or domestic investors from India who channelize their investments through a tax haven to avoid taxes in India. The investment by foreigners is known as Treaty Shopping and the investment by Indians is known as Round Tripping.
The term 'West Texas Intermediate', sometimes found in news, refers to a grade of
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