OrbitaxIt has been reported that Kuwait and Saudi Arabia, which are respectively negotiating tax treaties with India, are seeking to have capital gains arising from the sale/transfer of moveable property taxed in the state of residence. This request for residence-based taxation for these capital gains appears to stem from the Comprehensive Economic Cooperation Agreement (CEPA) between India and Singapore that was signed on 29 June 2005. The CEPA includes a protocol to the existing India-Singapore tax treaty, whereby Article 13 was amended to provide that capital gains on sale of shares derived by a resident of one of the states will only be taxable in the resident country. Accordingly, capital gains arising to a Singaporean resident on sale of shares in Indian companies would not be liable to tax in India.
