India recently notified the new Double Taxation Avoidance Agreement (‘ New DTAA’), entered into with the state of Qatar, on October 24, 2025.^[1] The DTAA and the corresponding protocol were signed at New Delhi on February 18, 2025,^[2] and came into force on September 10, 2025. The preceding treaty between the two nations was signed on April 7, 1999 and had been in effect since January 15, 2000.^[3]

Broadly, the New DTAA modernises the treaty framework along two tracks. Firstly, it incorporates several Base Erosion and Profit Shifting (‘BEPS’) measures that were introduced through the Multilateral Instrument (‘MLI’)^[4]; secondly, it introduces a range of bilateral policy changes on rates, scope and definitions that have not been sourced from the MLI. The result is a comprehensive refresh of the 1999 text, with clearer anti-abuse architecture, a more robust Permanent Establishment (‘PE’) article, refined distributive rules and an updated administrative toolkit.

Several provisions reflect direct adoption of MLI principles. The preamble now expressly targets treaty-shopping and reflects an intent to eliminate opportunities for non-taxation/ reduced taxation, aligning with the BEPS minimum standard. Article 1 now includes the concept of ‘fiscally transparent entities’, adopting the same from Article 3(1) of the MLI. For dual resident entities, a mutual agreement tie-breaker procedure has been put into place, requiring competent authorities of both the countries to mutually determine residence having regard to several factors. The PE article now incorporates the ‘closely-related enterprise’ test and an ‘anti-fragmentation’ rule, preventing the artificial splitting of cohesive business operations to retain preparatory/ auxiliary character. Furthermore, the Principal Purpose Test (‘PPT’) is now embedded as a standalone entitlement-to-benefits provision, denying treaty relief where one of the principal purposes of an arrangement/ transaction was to obtain such a relief. The Mutual Agreement Procedure (‘MAP’) has also been strengthened in line with the MLI.

Beyond the MLI-sourced measures, the new DTAA includes several other updates and clarifications. The PE definition now expressly includes the concepts of an installation PE as well as a service PE. Article 7 (‘Business Profits’) clarifies non-deductibility of intra-charge items and recognises customary apportionment methods, wherever applicable. On dividends, while the headline 5%/ 10% rate structure is retained, the 5% rate is now keyed to a higher 25% shareholding threshold, as opposed to the earlier 10%. The interest article now expressly accommodates ‘Islamic finance instruments’ where the substance is assimilable to a loan. Capital gains are tightened through a 50% immovable property value threshold for shares deriving value from real estate in the source state. Further clarifications have been incorporated into the article on ‘Exchange of Information’.

Finally, it bears noting that both India and Qatar had duly listed their 1999 DTAA as a ‘Covered Tax Agreement’ under the MLI. However, with the conclusion and notification of this new bilateral tax treaty, the parties have effectively refreshed the text to incorporate selected BEPS MLI measures, while also renegotiating several substantive articles.

[1]   Notification No. 154/2025, dated 24.10.2025.

[2]   Both the countries had issued a joint statement in February 2025 signalling their shared commitment to strengthen the bilateral relations through regular and structured cooperation. https://www.mea.gov.in/bilateral-documents.htm?dtl/39083/India++Qatar+Joint+Statement+February+
18+2025

[3]   Notification No. GSR 96(E), dated 08.02.2000.

[4]   https://www.oecd.org/en/topics/sub-issues/beps-multilateral-instrument.html