India and Nepal have signed the Double Tax Avoidance Agreement, DTAA, today in Kathmandu. Finance Minister Pranab Mukherjeee and his Nepalese counterpart Barsha Man Pun signed the agreement at a ceremony in Singha Darbar at the Prime Minister's office.

In his statement, Mr. Mukherjee said that India and Nepal have revised the DTAA. This will provide tax stability to the residents of India and Nepal and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Nepal. He added that the revised DTAA, the threshold withholding tax rates on dividends and interest, are rationalized to reflect the present day situation and developments in the area of international taxation.

The Finance Minister of Nepal, Mr. Barshman Pun said the DTAA will help boost overall business and investment climate in Nepal. He added that the agreement will come into force on a date notified by both countries.

Earlier, Mr. Mukherjee called on the Prime Minister Dr. Baburam Bhattarai. He said that he briefed Prime Minister on the progress made on implementation of the agenda agreed upon during the visit of the Prime Minister of Nepal to India, as contained in the Joint Press Statement.

He also held bilateral consultations with his counterpart, Barsaman Pun. The two sides reviewed bilateral economic cooperation and discussed ways and means to expand the economic relations between the two countries.

Mr. Mukherjee also called on the President, Dr. Ram Baran Yadav. He is also to hold meetings with leaders of political parties. The Finance Minster is on a day long visit to Kathmandu.