Download Word Document In English. (Rs.85/-) Italy Double Taxation Avoidance Agreement Income-tax Act,1961:Notification under Section 90:Convention between the Government of Republic of the India and the Government of the Republic of Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income Notification No. G.S.R. 189(E),dtd. 25.04.1996. Whereas the annexed Convention between the Government of the Republic of India and the Government of the Republic of Italy for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income has entered into force on 23-11-1995 after the exchange of instruments of ratification by the Contracting States in accordance with paragraph 1 of Article 30 of the said Convention; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India. ANNEXURE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF ITALY FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Republic of Italy Desiring to conclude an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income Have agreed as follows: CHAPTER I SCOPE OF THE CONVENTION Article 1 PERSONAL SCOPE This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1.     The taxes to which the Convention shall apply are: a.     In the case of the India:                       i.        the Income-tax including any surcharge thereon; and                      ii.        the surtax; (hereafter referred to as " Indian tax "); b.    In the case of Italy:                       i.        the personal income-tax;                      ii.        the corporate income-tax; and                     iii.        the local income-tax; even if they are collected by withholding taxes at the source; (hereafter referred to as " Italian Tax "). 2.     The Convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Convention in addition to, or in place of, the taxes referred to in paragraph 1 of this Article. 3.     At the end of each year, the competent authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation laws which are the subject of this Convention and furnish copies of relevant enactments and regulations. CHAPTER II DEFINITIONS Article 3 GENERAL DEFINITIONS 1.     For the purposes of this Convention, unless the context otherwise requires: a.     the term 'India' means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with International Law; b.    the term 'Italy' means the Republic of Italy including the territorial waters of Italy and airspace above them, as well as any area beyond the said territorial waters, specifically it includes the sea-bed and the sub-soil contiguous to the territory of the peninsula and the Italian islands situated beyond the territorial waters within bounds indicated by the Italian law on the exploration and the exploitation of their natural resources; c.     the terms " a Contracting State " and " the other Contracting State " mean India or Italy, as the context requires; d.    the term " tax " means Indian tax or Italian tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this convention applies or which represents a penalty imposed relating to those taxes; e.     the term " person " shall have the meaning assigned to it in the taxation laws in force in the respective Contracting States; f.     the term " company " means any body corporate or any entity which is treated as a company or a body corporate under the taxation laws of the respective Contracting States; g.    the terms " enterprise of a Contracting State " and " enterprise of the other Contracting State " mean, respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; h.     the term " fiscal year " in relation to Indian tax means " previous year " as defined in the Income-tax Act, 1961 (43 of 1961); i.      the term 'international traffic' means any transport by a ship or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other, Contracting State; j.      the term " national " means any individual possessing the nationality of a Contracting State and any legal person, partnership or association deriving its status from the law in force in the Contracting State; k.     the term " competent authority " means in the case of India, the Central Government in the Ministry of Finance (Deptt. of Revenue) or their authorised representative, and in the case of Italy, the Ministry of Finance; 2.     In the application of the provisions of this Convention by one of the Contracting States, any term not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State relating to the taxes which are the subject of this Convention. Article 4 FISCAL DOMICILE 1.     For the purposes of this Convention, the term " resident of a Contracting State " means any person who is a resident of that State in accordance with the taxation laws of that State. 2.     Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his residential status for the purposes of this Convention shall be determined in accordance with the following rules: a.     he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (hereinafter referred to as his " centre of vital interests "); b.    if the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c.     if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; d.    if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both the Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 1.     For the purposes of this Convention, the term " permanent establishment " means a fixed place of business through which the business of the enterprise is wholly or partly carried on. 2.     The term "permanent establishment" includes especially: a.     a place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop; f.     a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; g.    a warehouse in relation to a person providing storage facilities for others; h.     a premises 'used' as a sales outlet or for receiving or soliciting orders; i.      an installation or structure used for the exploration or exploitation of natural resources; j.      a building site or construction, installation or assembly project or supervisory activities in connection therewith, where such site, project or activities (together with other such sites project or activities, if any) continue for a period of more than six months, or where such project or supervisory activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six month and the charges payable for the project or supervisory activity exceed 10 per cent of the sale price of the machinery and equipment: Provided that for the purpose of this paragraph an enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it provides services or facilities in connection with or supplies plant and machinery on hire used or to be used in, the prospecting for, or extraction or production of mineral oils in the State. 3.     Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include: a.     the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; c.     the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research, or for similar activities which have a preparatory or auxiliary character, for the enterprise. However, the provisions of sub-paragraphs (a) to (e) shall not be applicable where the enterprise maintains any other fixed place of business in the other Contracting State for any purposes other than the purposes specified in the said sub-paragraphs. 4.     Notwithstanding the provisions of paragraphs 1 and 2 where a person--other than an agent of an independent status to whom paragraph 5 applies--is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned State, if-- a.     he has and habitually exercises in that State an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; b.    he has no such authority, but habitually maintains in the first mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or c.     he habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself or for the enterprise and other enterprise controlling, controlled by, or subject to the same common control, as that enterprise, d.    in so acting, he manufactures or processes in that State for the enterprise goods or merchandise belonging to the enterprise. 5.     An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise itself or on behalf of that enterprise and other enterprise controlling, controlled by, or subject to the same common control, as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. 6.     The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. CHAPTER III TAXATION OF INCOME Article 6 INCOME FROM IMMOVABLE PROPERTY 1.     Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2.     The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term "shall in any case" include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply. Usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources shall also be considered as "immovable property". Ships, boats and aircraft shall not be regarded as immovable property. 3.     The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS 1.     The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to (a) that permanent establishment; (b) sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; or (c) other business activities carried on in that other State of the same or similar kind as those effected through that permanent establishment. 2.     Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. In any case where the correct amount of profits attributable to a permanent establishment is incapable of determination or the determination thereof presents exceptional difficulties, the profits attributable to the permanent establishment may be estimated on a reasonable basis. 3.     In the determination of the profits of a permanent establishment, there shall be allowed as deduction expenses which are incurred for the purposes of the business of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. 4.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the purpose of export to the enterprise of which it is the permanent establishment. 5.     For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 6.     Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 AIR TRANSPORT 1.     Income derived from the operation of aircraft in international traffic by an enterprise of one of the Contracting States shall not be taxed in the other Contracting State. 2.     The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 3.     For the purposes of this Article: a.     interest of funds connected with the operation of aircraft in international traffic shall be regarded as income from the operation of such aircraft; and b.    the term " operation of aircraft " shall mean business of transportation by air of persons, livestock, goods or mail, carried on by the owners or lessees or charterers of aircraft, including the sale of tickets for such transportation on behalf of other enterprises, the incidental lease of aircraft and any other activity directly connected with such transportation. Article 9 SHIPPING 1.     Income of an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that State. 2.     The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency engaged in the operation of ships. 3.     For the purpose of this Article interest on funds connected with the operation of ships in international traffic shall be regarded as income from the operation of such ships and the provisions of Article 12 shall not apply in relation to such interest. 4.     For the purpose of paragraph 1 of this Article, income from the operation of ships in international traffic shall include: a.     profits derived from the rental on a full or bareboat basis of ships if such rental profits are incidental to the operation of ships in international traffic, and b.    profits derived from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) in connection with the transport of goods or merchandise in international traffic. 5.     Paragraph 1 shall not apply to profits arising as a result of coastal traffic. Article 10 ASSOCIATED ENTERPRISES Where- 1.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or 2.     the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Article 11 DIVIDENDS 1.     Dividends paid by a company which is resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends, the tax so charged shall not exceed: a.     15 per cent of the gross amount of the dividends if the beneficial owner is a company which owns at least 10 per cent of the shares of the company paying the dividends; b.    25 per cent of the gross amount of the dividends in all other cases. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3.     The provisions of paragraph 2(a) would apply in respect of dividends arising out of the investment made after the date of signature of the Convention. 4.     The term " dividends " as used in this Article means income from shares, " jouissance " shares or " jouissance " rights, mining shares, founders shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the taxation laws of the State of which the company making the distribution is a resident. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case, the dividends shall be taxable in that other Contracting State according to its own law. 6.     Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly or profits or income arising in such other State. Article 12 INTEREST 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in both the Contracting States. 2.     Notwithstanding the provisions of paragraph 1, the tax chargeable in a Contracting State on interest arising in that State and paid to a resident of the other Contracting State in respect of loans or debts shall not exceed 15 per cent of the gross amount of such interest. 3.     Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, if: a.     (a)the payer of the interest is the Government of that Contracting State or a local authority thereof, or b.    (b) the interest is paid to any agency or instrumentality (including a financial institution) which may be agreed upon in this behalf by the two Contracting States. 4.     The term " interest " as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises. 5.     The provisions of paragraphs 1 and 2 not apply if the recipient of the interest, being a resident of a Contracting State, carries on business in the other Contracting State, in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the interest shall be taxable in that other Contracting State according to its own law. 6.     Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political or administrative sub-division, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7.     Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 ROYALTIES AND FEES FOR TECHNICAL SERVICES 1.     Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, or fees for technical services, the tax so charged shall not exceed 20 per cent of the gross amount of the royalties or fees for technical services. 3.     The term " royalties " as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films or films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4.     The term " fees for technical services " as used in this Article means payments of any amount to any person other than payments to an employee of the person making payments, in consideration for the services of a managerial, technical or consultancy nature, including the provisions of services of technical or other personnel. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such a case the royalties or fees for technical services shall be taxable in that other Contracting State according to its own law. 6.     Royalties and fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political or administrative sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7.     Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of royalties or fees for technical services paid exceeds the amount which would have been paid in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 14 CAPITAL GAINS 1.     Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State. 2.     Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other State. 3.     Gains from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 4.     Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 5.     Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State. 6.     Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. Article 15 INDEPENDENT PERSONAL SERVICES 1.     Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character may be taxed in that State. Such income may also be taxed in the other Contracting State if such services are performed in that other State and if: a.     he is present in that other State for a period or periods aggregating 183 days in the relevant fiscal year, or b.    he has a fixed base regularly available to him in that other State for the purpose of performing his activities but only so much of the income as is attributable to that fixed base. 2.     The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. Article 16 DEPENDENT PERSONAL SERVICES 1.     Subject to the provisions of Articles 17, 18, 19, and 20 salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: a.     the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerning; and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and c.     the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3.     Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated. Article 17 DIRECTORS' FEES Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the Board of Directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State. Article 18 ARTISTES AND ATHLETES 1.     Notwithstanding the provisions of Articles 15 and 16, income derived by a resident of a Contracting State as an entertainer such as a theatre, motion picture, radio or television artiste or a musician or as an athlete, from his personal activities as such exercised in the other Contracting State may be taxed in that other State. 2.     Where income in respect of personal activities exercised by an entertainer or athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of articles 7, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3.     Notwithstanding the provisions of paragraph 1, income derived by an entertainer or an athlete who is a resident of a Contracting State from personal activities as such exercised in the other Contracting State, shall be taxable only in the first-mentioned Contracting State, if the activities in the other Contracting State are supported wholly or substantially from the public funds of the first-mentioned Contracting State, including any of its political sub-division or local authorities. 4.     Notwithstanding the provisions of paragraph 2 and Articles 7, 15 and 16, where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such in a Contracting State accrues not to the entertainer or athlete himself but to another person that income shall be taxable only in the other Contracting State, if that other person is supported wholly or substantially from the public funds of that other State, including any of its political sub-division or local authorities. Article 19 PENSIONS Subject to the provisions of paragraph 2 of Article 20, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment may be taxed in both the Contracting States. Article 20 GOVERNMENT SERVICE 1.       a.     Remuneration, other than a pension, paid by a Contracting State or a political or administrative sub-division or a local authority thereof to any individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State, who:                       i.        is a national of that State, or                      ii.        did not become a resident of that State solely for the purpose of rendering the services. 2.     a.     Any pension paid by, or out of funds created by, a Contracting State or a political or administrative sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such pension shall be taxable only in the other Contracting State if the individual is a national of and a resident of that State. 3.     The provisions of Articles 16, 17, 18 and 19 shall apply to remunerations and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political or administrative sub-division or a local authority thereof. Article 21 PROFESSORS, TEACHERS AND RESEARCHERS 1.     A professor or teacher who makes a temporary visit to a Contracting State for a period not exceeding two years for the purpose of teaching or conducting research at a university, college, school or other educational institution, owned by the Government or non-profit organizations, and who is, or immediately before such visit was, a resident of the other Contracting State shall be exempt from tax in the first-mentioned Contracting State in respect of remuneration for such teaching or research. 2.     This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. Article 22 STUDENTS AND TRAINEES 1.     An individual who is a resident of a Contracting State and visits the other Contracting State solely: a.     as a student at a university, college or other recognised educational institution in that other Contracting State, or b.    as a business apprentice, or c.     for the purpose of study, research of training, as a recipient of a grant, allowance or award, from a governmental, religious, charitable, scientific or educational organisation, shall be exempt from tax in that other Contracting State:                       i.        on his remuneration and all remittances from abroad for the purposes of maintenance, education or training;                      ii.        on the grant, allowance or award; and                     iii.        in respect of remuneration for an employment in that other Contracting State for such period of time as may be necessarily required for the completion of study, research or training, as the case may be. 2.     An individual who is a resident of a Contracting State and who visits the other Contracting State for a period not exceeding one year as employee of, or under contract with, an enterprise of the first-mentioned Contracting State or an organization referred to in paragraph 1 for the primary purpose of acquiring technical, professional or business experience from a person other than such enterprise or organization shall be exempt from tax in that other Contracting State in respect of remuneration for an employment in that other Contracting State for such period, to the extent such remuneration does not exceed 5,000,000 Italian Lires or its equivalent in Indian Rupees, as the case may be, in any year. Article 23 OTHER INCOME Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention may be taxed in both the Contracting States. CHAPTER IV Article 24 METHOD FOR ELIMINATION OF DOUBLE TAXATION 1.     The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Convention. 2.     It is agreed that double taxation shall be avoided in accordance with the following paragraphs of this Article. 3.       a.     The amount, if Italian tax payable under the laws of Italy and in accordance with the provisions of this Convention, whether directly or by deduction by a resident of India, in respect of income from sources within Italy which has been subjected to tax both in India and Italy, shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax. b.    For the purposes of the credit referred to in sub-paragraph (a) above, where the resident of India is a company by which surtax is payable, the credit to be allowed against Indian tax shall be allowed in the first instance against the income-tax payable by the company in India and, as to the balance, if any, against the surtax payable by it in India. 4.     a.     If a resident of Italy owns items of income which are taxable in India, Italy, in determining its income taxes specified in Article 2 of this Convention, may include in the basis upon which such taxes are imposed the said items of income, unless specific provisions of this Convention otherwise provide. In such a case, Italy shall deduct from the taxes so calculated the Indian tax on income, but in an amount not exceeding that proportion of the aforesaid Italian tax which such items of income bear to the entire income. On the contrary, no deduction will be granted if the item of income is subjected in Italy to a final withholding tax by request of the recipient of the said income in accordance with the Italian law. b.    For the purposes of paragraphs 3 and 4 of this Article, where tax on business profits, dividends, interests, royalties or fees for technical services arising in a Contracting State is exempted or reduced in accordance with the taxation laws of that State, such tax which has been exempted or reduced shall be deemed to have been paid. 12.  Income which in accordance with the provisions of this Convention is not to be subjected to tax in a Contracting State may be taken into account for calculating the rate of tax to be imposed in that Contracting State on other income. CHAPTER V SPECIAL PROVISIONS Article 25 NON-DISCRIMINATION 1.     The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be subjected. 2.     The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprise of that other State carrying on the same activities in the same circumstances of under the same conditions. 3.     Nothing contained in this Article shall be construed as obliging a Contracting State to grant to persons not resident in that State any personal allowances, reliefs and reductions for taxation purposes which are by law available only to persons who are so resident. 4.     Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement, connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances and under the same conditions. 5.     In this Article, the term "taxation" means taxes which are the subject of this Convention. Article 26 MUTUAL AGREEMENT PROCEDURE 1.     Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. The claim must be lodged within two years from the date of the assessment or of the withholding of tax at the source, whichever is the later. 2.     The competent authority shall endeavour if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Convention. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. Article 27 EXCHANGE OF INFORMATION 1.     The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by this Convention insofar as the taxation thereunder is not contrary to the Convention as well to prevent fraud or evasion of such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relating to, the taxes covered by this Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. 2.     In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting States the obligation: a.     to carry out administrative measures at variance with the laws or the administrative practice of that or of the other Contracting State; b.    to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c.     to supply information which would disclose any trade, business, industrial, commercial or professional secret or trader process or information, the disclosure of which would be contrary to public policy (order public). Article 28 DIPLOMATIC AND CONSULAR ACTIVITIES Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements. Article 29 REFUNDS 1.     Tax withheld at source in a Contracting State shall be refunded on application by or on behalf of the taxpayer or by the State of which he is a resident if such resident is entitled to a refund of that tax under the provisions of this Convention. 2.     Application for refund shall be made within the time limit fixed by the law of the Contracting State in which the tax has been withheld and shall be accompanied by a certificate of the Contracting State of which the taxpayer is a resident certifying that the conditions required for entitlement to the refund have been fulfilled. 3.     The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this Article, in accordance with the provisions of the Article 26 of this Convention. CHAPTER VI FINAL PROVISIONS Article 30 ENTRY INTO FORCE 1.     This Convention shall be ratified and the instruments of ratification shall be exchanged at Rome as soon as possible. 2.     This Convention shall enter into force on the date of exchange of instruments of ratification and its provisions shall have effect: a.     in India, in respect of income assessable in any "previous year" commencing on or after the first day of April of the calendar year next following the calendar year in which the Convention enters into force; b.    in Italy, in respect of income assessable in any taxable period commencing on or after the first day of January of the calendar year next following the calendar year in which the Convention enters into force. 3.     The existing Agreement between the Government of India and the Government of Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed at Rome on 12th January, 1981 shall cease to have effect at the time when the provisions of this Convention shall be effective in accordance with the provisions of paragraph 2. Article 31 TERMINATION This Convention shall remain in force indefinitely, but either of the Contracting States may on or before 30th June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force give to the other Contracting State, through diplomatic channels, written notice of termination. In such event the Convention shall cease to have effect: a.     in India, in respect of income assessable for any taxable period ("previous year") commencing on or after the 1st day of April in the calendar year next following that in which such notice is given. b.    in Italy, in respect of income assessable for any taxable period commencing on or after the 1st day of January in the calendar year next following that in which such notice is given. In witness thereof the undersigned, duly authorised thereto by their respective Governments, have signed the present. Done in duplicate at New Delhi the 19th day of February 1993, in the Hindi, Italian and English languages, all texts being equally authoritative except in the case of doubt when the English text shall prevail. For the Government of the For the Government of the Republic of India Republic of Italy PROTOCOL To the Convention between the Government of the Republic of India and the Government of the Republic of Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. At the signing of the Convention concluded today between the Government of the Republic of Italy and the Government of the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed upon the following additional provisions which shall form an integral part of the said Convention. It is understood: a.     that, with reference to Article 7, paragraph 3, the expression "expenses which are incurred for the purposes of the business of the permanent establishment" means the expenses directly connected with the activity of the permanent establishment, and royalties, commission and interest to the extent of the actual amount of expenses reimbursed, and in both cases as admissible in accordance with the provisions of the taxation laws of the Contracting State in which the permanent establishment is situated; b.    that, with reference to Article 12, paragraph 2, the expression "loans or debts" means, in the case of India, loans or debts approved in this behalf by the Government of India; c.     that, with reference to Article 20, the remuneration paid to an individual in respect of services rendered to the Bank of Italy, to the Italian State Railways (FF. SS.), to the Italian State Post undertaking (PP. TT.), to the Italian Foreign Trade Institution (I.C.E.), to the Italian Tourism body (E.N.I.T.), and to any corresponding Indian body or institution, are covered by the provisions concerning Government service and, consequently, by paragraphs 1 and 2 of the aforesaid Article. Other public bodies or institutions may also be included in the preceding list by mutual agreement between the competent authorities of the Contracting States

Download Word Document In English. (Rs.40/-) Swiss Federal Council Notification No. G. S. R. 74(E), dated 7th February, 2001. Whereas the annexed protocol amending the Agreement' between the Government of the Republic of India and the Government of the Swiss Federal Council for the Avoidance of Double Taxation with respect to taxes on income has come into force on 20th December, 2000, the date of the later of the notifications by both the Contracting States to each other, under article 16 of the protocol amending the agreement, of the satisfaction of all the legal requirements and procedures for giving effect to the said protocol; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said protocol amending the agreement, shall be given effect to in the Union of India. ANNEXURE PROTOCOL AMENDING THE AGREEMENT BETWEEN THE REPUBLIC OF INDIA AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE SWISS FEDERAL COUNCIL. Desiring to amend the Agreement between the Republic of India and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income, signed at New Delhi on 2nd November, 1994 (hereinafter referred to as "the Agreement"), have agreed as follows: Article 1 Sub-paragraph (a) of paragraph 1 of article 3 of the agreement shall be replaced by the following: a.     'the term "India" means the territory of India and includes the territorial sea and the air space above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law, including the UN Convention on the law of the sea.' Article 2 1.     The first sentence of sub-paragraph (1) of paragraph 2 of article 5 of the agreement shall be replaced by the following: a.     'the furnishing of technical services, other than services as defined in article 12, within a Contracting State by an enterprise through employees or other personnel, but only if:...' 2.     In paragraph 3 of article 5 of the agreement the following sub-paragraph shall be inserted after sub-paragraph (e): '(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxilliary character.' 3.     The following paragraph shall be inserted after paragraph 3 of article 5 of the agreement: 4.     'Notwithstanding the preceding provisions of this article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of an independent status to whom paragraph 6 applies.' 5.     The existing paragraphs 4 to 6 of article 5 of the agreement shall become paragraphs 5 to 7. 6.     In the first sentence of paragraph 5 of article 5 of the agreement the words '... other than an agent of an independent status to whom para graph 5 applies...' shall be replaced by the words '... other than an agent of an independent status to whom paragraph 6 applies... " Article 3 Paragraph 1 of article 6 of the agreement shall be replaced by the following: 1.     'Income from immovable property may also be Contracting State in which such property is situated.' Article 4 Paragraph 1 of article 8 of the agreement shall be replaced by the following: 1.     'Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in that State.' Article 5 1.     '1. Article 9 of the agreement shall become paragraph 1 of article 9. 2.     The following paragraph shall be inserted after paragraph 1 of article 9 of the agreement: 'Where a Contracting State includes in the profits of an enterprise of that State---and taxes accordingly---profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustments, due regard shall be had to the other provisions of this agreement and the competent authorities of the Contracting States shall, if necessary consult each other.' Article 6 1.     The first sentence of paragraph 2 of article 10 of the Agreement shall be replaced by the following: 2.     'However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent. of the gross amount of the dividends.' Paragraph 4 of article 10 of the agreement shall be replaced by the following: 'The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.' 3.     In paragraph 5 of article 10 of the agreement the words 'or a fixed base' shall be inserted after the term 'permanent establishment'. Article 7 1.     Paragraph 2 of article 11 of the agreement shall be replaced by the following: 2.     ' However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent. of the gross amount of the interest.' Paragraph 3 of article 11 of the agreement shall be deleted. The existing paragraph 4 of article 11 of the agreement shall become paragraph 3. Sub-paragraph (a) of paragraph 3 of article 11 of the agreement shall be replaced by the following: 3.     Notwithstanding the provisions of paragraph 2: 4.     interest arising in Switzerland and paid to a resident of India shall be taxable only in India if it is paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by the Government, a political sub-division, a statutory body or a local authority of India or the Export-Import Bank of India, the Reserve Bank of India, the Industrial Finance Corporation of India, the Industrial Development Bank of India, the National Housing Bank, the Small Industries Development Bank of India or by any institution specified and agreed in letters exchanged between the competent authorities of the Contracting States.' The existing paragraphs 5 to 8 of article 11 of the agreement shall become paragraphs 4 to 7. Paragraphs 5 and 6 of article 11 of the agreement shall be replaced by the following: 5.     '5. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of article 7 or article 14, as the case may be, shall apply. 6.     Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.' Article 8 1.     The heading and paragraphs 1 to 7 of article 12 of the agreement shall be replaced by the following: Article 12 ROYALTIES AND FEES FOR TECHNICAL SERVICES 1.     Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State; but if the beneficial owner of the royalties or fees for technical services is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent. of the gross amount of the royalties or the fees for technical services. 3.     The term "royalties" as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic, or scientific work, including cinematograph films or work on film, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent trademark, design or model, plan, secret formula or process, or for the use of, or the right to use, any industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4.     For purposes of this article the term "fees for technical services" means payments of any kind to any person in consideration for the rendering of any managerial, technical or consultancy services, including the provision of services by technical or other personnel. 5.     Notwithstanding paragraph 4, "fees for technical services" does not include amounts paid: a.     for teaching in or by educational institutions; b.    for services covered by article 14 or article 15, as the case may be. 6.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of article 7 or article 14, as the case may be, shall apply. 7.     Royalties and fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated.' 8.     In paragraph 8 of article 12 of the agreement the term 'included services' shall be replaced by the term 'technical services'. Article 9 1.     Paragraph 2 of article 13 of the agreement shall be replaced by the following: 'Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may also be taxed in that other State.' 2.     Paragraph 5 of article 13 shall be replaced by the following: 'Gains from the alienation of shares other than those mentioned in paragraph 4, of a company which is a resident of a Contracting State: a.     shall be taxable only in the Contracting State of which the alienator is a resident; b.    notwithstanding the provision of sub-paragraph (a), India may tax gains from the alienation of shares in a company which is a resident of India. In this case the provisions of sub-paragraph (b) of paragraph 1, of article 23 shall apply.' Article 10 1.     The following article 14 relating to independent personal services shall be inserted after article 13 relating to capital gains: Article 14 INDEPENDENT PERSONAL SERVICES 1.     Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State--- a.     if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or b.    if his stay in the other State is for a period or periods aggregating 183 days or more in any 12 month period commencing or ending in the fiscal year concerned; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State. The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, surgeons, dentists and accountants.' 2.     The existing article 14 shall be renumbered as article 15 and replaced by the following article: Article 15 DEPENDENT PERSONAL SERVICES 1.     Subject to the provisions of articles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: a.     the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any 12 month period commencing or ending in the fiscal year concerned, and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and c.     the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. Notwithstanding the preceding provisions of this article, remuneration derived in respect of an employment exercised abroad a ship or aircraft operated in international traffic, by an enterprise of a Contracting State may be taxed in that State.' 3.     Articles 15 to 20 of the agreement shall become articles 16 to 21. Article 11 The following article shall be inserted after article 21 of the agreement: Article 22 OTHER INCOME 1.     Items of income of a resident of a Contracting State, wherever arising, not dealt within the foregoing articles of this agreement shall be taxable only in that State. 2.     The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply. 3.     Notwithstanding the provisions of paragraph 1, if a resident of a Contracting State derives income from sources within the other Contracting State in the form of lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever, such income may be taxed in that other Contracting State.' Article 12 1.     Article 21 of the agreement shall become article 23. 2.     In sub-paragraph (a) of paragraph 2 of renumbered article 23 of the agreement the reference made to sub-paragraph (d) shall be deleted. 3.     In sub-paragraph (b) of paragraph 2 of renumbered article 23 of the agreement, the term 'included services' shall be replaced by the term 'technical services'. 4.     Sub-paragraph (c) of paragraph 2 of renumbered article 23 of the agreement shall be deleted. 5.     Sub-paragraph (d) of paragraph 2 of renumbered article 23 of the agreement shall be replaced by the following: '(c) Where a resident of Switzerland derives interest dealt with in sections 10(4), 10(4B), 10(15)(iv) and 80L of the Indian Income-tax Act of 1961 (43 of 1961), and referred to in sub-paragraph (d) of paragraph 3 of article 11, Switzerland shall allow, upon request, a relief to such resident of an amount equal to 10 per cent. of the gross amount of the interest.' Article 13 1.     Article 22 of the agreement shall become article 24. 2.     Paragraph 1 of renumbered article 24 of the agreement shall be replaced by the following: 'Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be subjected. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not residents of one or both of the Contracting States.' 3.     The following paragraph shall be inserted after paragraph 2 of renumbered article 24 of the agreement: 'Except where the provisions of article 9, paragraph 7 of article 11, or paragraph 8 of article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.' 4.     The existing paragraphs 3 and 4 of renumbered article 24 of the agreement shall become paragraphs 4 and 5. Article 14 Articles 23 to 27 of the agreement shall become articles 25 to 29. Article 15 A.    In the first sub-paragraph of paragraph 1 of the protocol to the agreement the words '... in paragraph 2, sub-paragraph (a) of article 12' shall be replaced by the words'... in paragraph 2 of article 12.'. B.    In the third sub-paragraph of paragraph 1 of the Protocol to the Agreement the words 'with respect to paragraph 4 of article 5...' shall be replaced by the words 'with respect to paragraph 5 of article 5...'. C.    In the protocol to the agreement the following paragraph shall be inserted after paragraph 2: 'With reference to paragraph 2 of article 9.----It is understood that Switzerland shall only make an appropriate adjustment after consultation with the competent authority of India and after reaching an agreement on the adjustments of profits in both Contracting State.' D.    The existing paragraph 3 of the protocol to the agreement shall be replaced by the following: 'With reference to articles 10, 11 and 12.---If after the signature of the protocol of 16th February, 2000, under any Convention, Agreement or Protocol between India and a third State which is a member of the OECD India should limit its taxation at source on dividends, interest, royalties or fees for technical services to a rate lower or a scope more restricted than the rate or scope provided for in this agreement on the said items of income, then, Switzerland and India shall enter into negotiations without undue delay in order to provide the same treatment to Switzerland as that provided to the third State.' E.    In the Protocol to the agreement the following paragraph shall be inserted after paragraph 4: "5. With reference to sub-paragraph (b) of paragraph 5 of article 13.---It is understood that if at a later stage Switzerland shall introduce a capital gains tax on the alienation of shares of a Swiss company other than shares of a company mentioned in paragraph 4, paragraph 5 of article 13 shall be replaced by the following: "Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State". In this case sub-paragraph (b) of paragraph 1 of article 23 of the agreement shall be deleted.' F.    The existing paragraph 4 of the protocol to the agreement shall become paragraph 6. G.    In the protocol to the agreement the following paragraph shall be inserted after paragraph 6: 'With reference to paragraph 4 of article 24.---It is understood that this provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which a company of the other Contracting State has in the first mentioned State at a rate of tax which is higher than that imposed on the profits of a similar company of the first-mentioned Contracting State nor as being in conflict with the provisions of paragraph 3 of article 7 of this agreement.' H.    The existing paragraph 5 of the protocol to the agreement shall become paragraph 8 and its heading shall be replaced by the following: 'With reference to article 25'. Article 16 1.     The Governments of the Contracting States shall notify each other through diplomatic channels that all legal requirements and procedures for giving effect to this protocol have been satisfied. 2.     The protocol, which shall form an integral part of the agreement, shall enter into force on the date of the later of the notifications referred to in paragraph I and its provisions shall have effect: a.     in India, in respect of income arising in any fiscal year beginning on or after the first day of April next following the calendar year in which the protocol entered into force; and b.    in Switzerland, in respect of income arising in any fiscal year beginning on or after the first day of January next following the calendar year in which the protocol entered into force. In witness whereof  the undersigned, duly authorised thereto by their respective Governments, have signed this protocol. Done  in duplicate at New Delhi this 16th day of February, 2000, in German, Hindi and English languages, all the texts being equally authentic, In case of divergence of interpretation the English text shall prevail. For the Government of the Republic of India........................................ (Yashwant Sinha) For the Swiss Federal Council....................................... (Pascal Couchepin) [Notification No. 35/F. No. 501/7/73-FTD]

Download Word Document In English. (Rs.20/-) Lebanon AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF LEBANON FOR THE AVOIDANCE OF DOUBLE TAXATION OF INCOME OF ENTERPRISES OPERATING AIRCRAFT Notification No. 86/F. No. 11(53)/63-TPL, dated 28-6-1969. G.S.R.1552-1553.---Whereas the annexed Agreement between the Government of India and the Government of the Republic of Lebanon for the avoidance of double taxation of income of enterprises operating aircraft has been ratified and the instruments of ratification exchanged, as required by Article V of the said Agreement. Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. ANNEXURE Agreement between the Government of India and the Government of the Republic of Lebanon for the avoidance of double taxation of income of Enterprises operating aircraft. Whereas the Government of India and the Government of the Republic of Lebanon desire to conclude an agreement for the avoidance of double taxation of income of enterprises operating aircraft chargeable to tax in the said countries in accordance with the respective laws; Now, therefore, the said two Governments do hereby agree as follows: ARTICLE I 1.     The taxes to which this Agreement shall apply are: a.     in the case of India:                       i.        the income-tax including any surcharge on income-tax imposed under the Income-tax Act, 1961 (43 of 1961) as amended; and                      ii.        the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964) as amended: (hereinafter referred to as " Indian tax "); b.    in the case of Republic of Lebanon: the income-tax including any additional tax on income-tax prescribed under the Income-tax law issued by the Legislative Decree No. 144, dated June 12, 1959 as amended: (hereinafter referred to as " Lebanese tax "). 2.     This Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. ARTICLE II 1.     In this Agreement, unless the context otherwise requires: a.     the term " India " shall have the meaning assigned to it in Article I of the Constitution of India; b.    the term " the Republic of Lebanon " shall have the meaning assigned to it in the Lebanese Constitution; c.     the term " a Contracting State " and the " other Contracting State " means India or the Republic of Lebanon, as the context requires; d.    the term " tax " means " Indian tax " or " Lebanese tax ", as the context requires; (e) the term " enterprise of a Contracting State " means                       i.        an airline designated by the Government of that State in pursuance of the Agreement dated September 19, 1964, as may be amended or revised from time to time, between the Government of India and the Government of the Republic of Lebanon relating to air services, or                      ii.        an airline which is authorised by the Government of that State by a general or special arrangement between the two Contracting States to operate charter flights between or beyond their territories. 2.     In the application of the provisions of this Agreement by one of the Contracting States, any term used but not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State relating to the taxes to which this Agreement applies. ARTICLE III 1.     Income derived front the operation of aircraft in international traffic by an enterprise of one of the Contracting States shall be exempt from tax in the other Contracting State. 2.     Paragraph (1) shall likewise apply in respect of participations in pools of any kind of enterprises engaged in air transport. ARTICLE IV The laws in force in either of the Contracting States will continue to govern the assessment and taxation of income in the Contracting States except where express provision to the contrary is made in this Agreement. ARTICLE V 1.     This Agreement shall be ratified and the instruments of ratification shall be exchanged at Beirut as soon as possible. 2.     This Agreement shall enter into force on the date of the exchange of the instruments of ratification and its provisions shall have effect: a.     in India, in respect of income assessable for any year of assessment commencing on or after the 1st day of April, 1962; b.    in Lebanon, in respect of income assessable for any year of assessment commencing on or after the 1st day of April. 1962. ARTICLE VI This Agreement shall continue in effect indefinitely but either of the Contracting States may, on or before the 30th day of June in any calendar year after the year 1970, give notice of termination to the other Contracting State and in such event this Agreement shall cease to be effective: a.     in India, in respect of income assessable for any year of assessment commencing on or after the 1st day of April in the calendar year next following that year in which the notice is given; b.    in Lebanon, in respect of income assessable for any year of assessment commencing on or after the 1st day of April in the calendar year next following that year in which the notice is given. IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed the present Agreement. DONE in duplicate at Beirut, this 22nd day of February, One thousand nine hundred and sixty-eight in the Hindi, Arabic and English languages, all the three texts being equally authentic, except in the case of doubt when the English text shall prevail. Sd/- K. Srinivasan, For the Government of India (Jaswant Singh) Sd/- Khalil Salem, For the Government of the Republic of Lebanon. (Omuraliev Esengul Kasymovich) PROTOCOL PROTOCOL BETWEEN THE GOVERNMENT OF INDIA AND GOVERNMENT OF THE REPUBLIC OF LEBANON The Government of India and the Government of the Republic of Lebanon. Having entered into an Agreement for the avoidance of Double Taxation of Income of enterprises operating aircraft which is effected in respect of income assessable for any year of assessment commencing on or after the 1st day of April, 1962. Recognising that Air-India which is an enterprise of India and Middle East Airlines which is an enterprise of the Republic of Lebanon have been deriving income, respectively, in the Republic of Lebanon and India from the operation of aircraft in international traffic which is assessable for one or more years of assessment prior to the year of assessment commencing on the 1st day of April, 1962. Considering that the Indian Income-tax Act, 1922 (11 of 1922) has been repealed with effect from the 1st day of April, 1962. Have accordingly agreed at the time of signing of the said Agreement as follows: " The Government of India has not levied any Indian tax on the income of Middle East Airlines for any of the years of assessment aforementioned and here by agrees not to levy such tax hereafter, and The Government of the Republic of Lebanon has not levied any Lebanese tax on the income of Air-India for any of the years of Assessment aforementioned and hereby agrees not to levy such tax hereafter. And, have further agreed that this Protocol shall constitute an integral part of the said Agreement. In witness whereof the undersigned, duly authorised thereto, have signed the present Protocol. Done in duplicate at Beirut this 22nd day of February, One thousand nine hundred and sixty-eight in the Hindi, Arabic and English languages, all the three texts being equally authentic, except in the case of doubt when the English text shall prevail. Sd/- K. Srinivasan, For the Government of India (Jaswant Singh) Sd/- Khalil Salem, For the Government of the Republic of Lebanon. (Omuraliev Esengul Kasymovich)

Download Word Document In English. (Rs.85/-) Belarus Double Taxation Avoidance Agreement Belarus Income-Tax Act, 1961: Notification under section 90: Agreement Between the Government of Republic of India and the Government of Republic of Belarus for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income Notification No. G.S.R. 392(E), dtd. 17.7.1998 Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Republic of Belarus for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on property (capital) shall enter into force on the Seventeenth day of July, 1998, in accordance with Article 30 of the said Agreement, thirty days after the receipt of the later of the notifications by both the Contracting States to each other of completion of the procedure required by their respective laws for bringing into force the said Agreement. Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), and section 44A of the Wealth-tax Act, 1957 (27 of 1957), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF BELARUS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON PROPERTY (CAPITAL). The Government of the Republic of India and the Government of the Republic of Belarus Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on property (capital): Have agreed as follows: Article 1 PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1.     This Agreement shall apply to taxes on income and on property (capital) imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied. 2.     There shall be regarded as taxes on income and on property (capital) all taxes imposed on total income, on total property (capital) or on elements of income or of property (capital) including taxes on gains from the alienation of immovable property or property other than immovable property and taxes on the total amounts of wages or salaries paid by enterprises. 3.     The taxes to which this Agreement shall apply are in particular: a.     In India:                       i.          the income-tax including any surcharge thereon; and                      ii.          wealth-tax (hereinafter referred to as "Indian Tax"); and b.    In Belarus:                       i.          the tax on income and profits of enterprises associations and organisations:                      ii.          the income-tax on individuals; and                     iii.          the tax on immovable property (hereinafter referred to as "Belarusian tax"). 4.     The Agreement shall apply also to any similar or substantially identical taxes which are imposed by either Contracting State after the date of signature of the Agreement in addition to, or in place of, the taxes referred to in paragraph 3 above. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws. Article 3 GENERAL DEFINITIONS 1.             In this Agreement, unless the context otherwise requires a.     the term "India" means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law and the U. N. Convention on the law of the sea; b.    the term "Belarus" means the Republic of Belarus and when used in a geographical sense, means the territory over which the Republic of Belarus exercises under the laws of the Republic of Belarus and in accordance with international law sovereign rights and jurisdiction; c.     the terms "a Contracting State" and "the other Contracting State" means as the context requires, India or the Republic of Belarus; d.    the term "tax" means Indian tax or Belarusian tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or which represents a penalty imposed relating to those taxes; e.     the term "person" includes an individual, a company, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States; f.     the term "company" means:                                               i.        in India, any body corporate or other entity which is treated as a company or body corporate under the taxation laws in force;                                              ii.        in Belarus, any legal person or any entity which is treated as a legal person for tax purposes; g.    the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; h.     the term "competent authority" means:                                               i.        in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative;                                              ii.        in the case of Belarus, the State Tax Committee or its authorised representative; i.              the term "national" means:                                               i.        any individual possessing the nationality of a Contracting State;                                              ii.        any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State; j.      the term "international traffic" means any transport by a ship or aircraft operated b-,7 an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; k.     the term "fiscal year" means:                                           i.    in the case of India, the "previous year" as defined under section 3 of the Income-tax Act, 1961;                                          ii.    in the case of Belarus, the calendar year from lst day of January to 31st day of December of the year. 2.     As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State concerning the taxes to which the Agreement applies. Article 4 RESIDENT 1.     For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, place of incorporation, residence, place of management or any other criterion of a similar nature. However, this term does not include any person who is liable to tax in that State only in respect of income from sources in that State or property situated therein. 2.     Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows: a.     he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); b.    if the State in which he has his centre of vital interests cannot be determined or if he does not have a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c.     if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; d.    if each State considers him as its own national or if he is not a national of either of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated. If the State in which its place of effective management is situated cannot be determined, then the competent authorities of the Contracting States shall settle the question by mutual agreement. Article 5 PERMANENT ESTABLISHMENT 1.     For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2.     The term "permanent establishment" includes especially: a.     a place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop; f.     a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; g.    a warehouse in relation to a person providing storage facilities for others; h.     a farm, plantation or other place where agriculture, forestry, plantation, or related activities are carried on; i.      a sales outlet; j.      an installation or structure used for the exploration or exploitation of natural resources k.     a building site or construction or assembly project or supervisory activities in connection therewith only if such site, project or activity lasts for more than six months. 3.     Notwithstanding the preceding provisions of this Article, the term permanent establishment" shall be deemed not to include: a.     the use Of facilities solely for the purposes Of Storage, display or delivery of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; c.     the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or of collecting information, for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; f.     the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. However, the provisions of sub-paragraphs (a) to (f) shall not be applicable where the enterprise maintains any other fixed place of business in the other Contracting State for any purposes other than the purposes specified in the said sub-paragraphs. 4.     Notwithstanding the provisions of paragraphs 1 and 2, where a person-other than an agent of an independent status to whom paragraph 5 applies-is acting on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person: a.     has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 3 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph; or b.    has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise. 5.     An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, a commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise itself or on behalf of that enterprise and other enterprises controlling, controlled by, or subject to the same common control, as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. 6.     The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. 7.     An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it provides services or facilities in connection with, or supplies plant and machinery on hire used for or to be used in the prospecting for, or extraction or exploitation of mineral oils in that State. 8.     Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of an independent status to whom paragraph 5 applies. Article 6 INCOME FROM IMMOVABLE PROPERTY 1.     Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2.     The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. Ships, boats, motor vehicles and aircraft shall not be regarded as immovable property. 3.     The provisions of paragraph 1 shall apply to income derived from the direct use, letting or use in any other form of immovable property. 4.     The provisions of paragraphs 1 and 3 shall apply to income from immovable property of an enterprise and also to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS 1.     The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may also be taxed in the other State but only so much of them as is attributable to: a.     that permanent establishment; b.    sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; or c.     other business activities carried on in that other State of the same or similar kind as those effected through that permanent establishment. 2.     Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might make if it were a separate independent enterprise engaged in the same or similar activities under the same or similar conditions and acting wholly independently with the enterprise of which it is a permanent establishment. 3.     In determining the profits of a permanent establishment, there shall be allowed as deduction expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of and subject to the limitations of the taxation laws of that State. 4.     No profits shall be attributed to a permanent establishment by reason of the mere purchase of goods or merchandise by that permanent establishment for the enterprise. 5.     For the purpose of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there are good and sufficient reasons to the contrary. 6.     Where the profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 INTERNATIONAL TRAFFIC 1.     Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic, as the case may be, shall be taxable only in that State. 2.     The provisions Of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency, 3.     For the purposes of this article, interest on funds connected with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of such ships or aircraft, and the provisions of Article 11 shall not apply in relation to such interest. 4.     For the purposes of this Article, profits from the operation of ships or aircraft in international traffic shall mean profits derived by an enterprise from the transportation by sea or air respectively, of passengers, mail, livestock, goods or merchandise carried on by the owners or lessees or charterers of ships or aircraft. This will also include: a.     the sale of tickets for such transportation on behalf of other enterprises; b.    the use, maintenance, or rental of containers (including trailers, barges, and related equipment for the transportation of containers) used in connection with the operation of ships or aircraft in international traffic; c.     the rental of ships or aircraft incidental to the operation of ships or aircraft in international traffic; and d.    other activity directly connected with operation of ships or aircraft in international traffic. Article 9 ASSOCIATED ENTERPRISES Where, a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Article 10 DIVIDENDS 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other Contracting State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed: a.     10 per cent. of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 25 per cent. of the shares of the company paying the dividends; b.    15 per cent. of the gross amount of the dividends in all other cases. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3.     The term "dividends" as used in this article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other rights which is subjected to the same taxation treatment as income from shares under the laws of the Contracting State of which the company making the distribution is a resident. 4.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding, in respect of which, the dividends are paid, is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or 14, as the case may be, shall apply. 5.     Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except in so far as such dividends are paid to a resident of that other State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State. Article 11 INTEREST 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent. of the gross amount of the interest. 3.     Notwithstanding the provisions of paragraph 2,- a.     interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by:                       i.        the Government, a political sub-division or a local authority of the other Contracting State; or                      ii.        the Central Bank of the other Contracting State or any other bank or Governmental financial institutions that may be mutually agreed upon between the two Contracting States. b.    interest arising in a Contracting State shall be exempt from tax in that Contracting State to the extent approved by the Government of that State if it is derived and beneficially owned by any person, other than a person referred to in sub-paragraph (a), who is a resident of the other Contracting State, provided that the transaction giving rise to the debt-claim has been approved in this regard by the Government of the first-mentioned Contracting State. 4.     The term "interest" as used in this Article means income from debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from Government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or 14, as the case may be, shall apply. 6.     Interest shall be deemed to arise in a Contracting State when the payer is that State itself, its political sub-division or a local authority or a resident of that State. Where, however, the person paying the interest whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated. 7.     Where by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 12 ROYALTIES AND FEES FOR TECHNICAL SERVICES 1.     Royalties or fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties or fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed 15 per cent. of the gross amount of the royalties or fees for technical services. 3.     The term "royalties" as used in this Article means payment of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematographic films or films or tapes for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4.     The term "fees for technical services" as used in this Article means payment of any kind in consideration for the rendering of any managerial, technical or consultancy services including the provision of services by technical or other personnel but does not include payments for services mentioned in Articles 14 and 15 of this Agreement. 5.     The provisions of paragraphs 1, and 2 shall not apply if the beneficial owner of the royalties or fees for technical services being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 6.     Royalties or fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are. borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7.     Where by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of royalties or fees for technical services, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 13 CAPITAL GAINS (GAINS FROM ALIENATION OF PROPERTY) 1.     Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may also be taxed in that other Contracting State. 2.     Gains from the alienation of property other than immovable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of property other than immovable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State. 3.     Gains from the alienation of ships or aircraft operated in international traffic or property other than immovable property pertaining to the operation of such ships or aircraft, shall be taxable only in the Contracting State of which the alienator is a resident. 4.     Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 5.     Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State. 6.     Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 INDEPENDENT PERSONAL SERVICES 1.     Income derived by a resident of a Contracting State from the performance of professional services or other independent activities of a similar character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State: a.     if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities, in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or b.    if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in a period of twelve months; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State 2.     The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as independent activities of physicians, lawyers, engineers, architects, dentists and accountants. Article 15 DEPENDENT PERSONAL SERVICES 1.     Subject to the provisions of Articles 17, 18, 19, 20 and 21 salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first mentioned State if: a.     the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any period of twelve months; and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and c.     the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other contracting State. 3.     Notwithstanding the preceding provisions of this Article, the remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by the enterprise of a Contracting State may be taxed in that State. Article 16 DIRECTORS' FEES Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State. Article 17 ARTISTS AND SPORTSPERSONS 1.     Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson from his personal activities as such exercised in the other Contracting State may be taxed in that other State. 2.     Where income in respect of personal activities exercised by an entertainer or a sportsperson in his capacity as such accrues not to the entertainer or sportsperson himself but to another person, such income may, notwithstanding the provisions of Articles 7, 14 and 15 be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised. 3.     The provisions of paragraphs 1 and 2, shall not apply to income from activities performed in a Contracting State by entertainers or sportspersons if the visit to that State is supported wholly by public funds of one or both of the Contracting States of political sub-divisions or local authorities thereof or the activity is exercised within the framework of cultural or sports co-operation agreement between the Contracting States. In such a case, the income is taxable only in the Contracting State of which the entertainer or sportsperson is a resident. Article 18 GOVERNMENT SERVICE 1.       a.     Remuneration, other than pension, paid by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:                                           i.    is a national of that State; or                                          ii.    did not become a resident of that State solely for the purpose of rendering the services. 2.       a.     Any pension paid by, or out of funds created by, a Contracting State or a political sub-division or a local authority thereof, to an individual in respect of services rendered to that State or sub-division or local authority thereof shall be taxed only in that State; b.    However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3.     The provisions of Articles 15, 16 and 19 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political sub-division or a local authority thereof. Article 19 NON-GOVERNMENT PENSIONS AND ANNUITIES 1.     Any pension, other than a pension referred to in Article 18, or any annuity derived by a resident of a Contracting State from sources within the other Contracting State shall be taxable only in the first-mentioned Contracting State. 2.     The term "pension" means a periodic payment made in consideration of past services or by way of compensation for injuries received in the course of performance of services. 3.     The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make payments in return for adequate and full consideration in money or money's worth. Article 2 STUDENTS AND APPRENTICES 1.     A student or business apprentice who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State and who is present in that other State solely for the purpose of his education or training, shall be exempt from tax in that other State on: a.     payments made to him by persons residing outside that other State for the purposes of his maintenance, education or training; and b.    remuneration from employment in that other State for an amount not exceeding the amount which is exempt from tax under the laws of the other Contracting State for any fiscal year; provided that such employment is directly related to his studies or is undertaken for the maintenance. 2.     The benefits of this article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken, but in no event shall any individual have the benefits of this article, for more than five consecutive years from the date of his first arrival in that other Contracting State. Article 21 PROFESSORS, TEACHERS AND RESEARCH SCHOLARS 1.     A professor or teacher who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college, or other similar institution in that Contracting State shall be exempt from tax in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date of his arrival in that other State. 2.     This article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. 3.     For the purposes of this article and article 20,. an individual shall be deemed to be a resident of the Contracting State if he is resident in that Contracting State in the fiscal year' In which he visits the other Contracting State or in the immediately fiscal year. Article 22 OTHER INCOME 1.     Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement shall be taxable only in that State. 2.     The provisions of paragraph 1 shall not apply to income other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right of property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 3.     Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Agreement, and arising in the other Contracting State may be taxed in that other State. Article 23 PROPERTY (CAPITAL) 1.     Property (capital) represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other State. 2.     Property (capital) represented by property other than immovable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or by property other than immovable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, may be taxed in that other State. 3.     Property (capital) represented by ships and aircraft operated in, international ' traffic or by boats engaged in inland waterways transport and by property other than immovable property pertaining to the operation of such ships, boats and aircraft shall be taxable only in the Contracting State of which the owner of such ships, boats, aircraft or property is a resident. 4.     All other elements of property (capital) of a resident of a Contracting State shall be taxed only in that State. Article 24 ELIMINATION OF DOUBLE TAXATION 1.     The laws in force in either of the Contracting States shall continue to govern the taxation of income and property (capital) on the respective Contracting State except where express provision to the contrary is made in this Agreement. 2.     In the case of India, double taxation shall be eliminated as follows: Where a resident of India derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in the Republic of Belarus, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in the Republic of Belarus whether directly or by deduction; and as a deduction from the tax on the capital of that resident an amount equal to the property (capital) tax paid in the Republic of Belarus. Such deduction in either case shall not, however, exceed that part of the income-tax or capital tax as computed before the deduction is given which is attributable, as the case may be, to the income or the capital which may be taxed in the Republic of Belarus. 3.     In the case of the Republic of Belarus, double taxation shall be eliminated as follows: Where a resident of the Republic of Belarus derives income which, in accordance with the provisions of this Agreement, may be taxed in India, the Republic of Belarus shall allow as a deduction from the tax on the income of that resident, an amount equal to the income-tax paid in India; and as a deduction from tax on the property (capital) of that resident, an amount equal to the capital tax paid in India. Such deduction shall not, however, exceed that part of the income-tax or property (capital) tax, as computed before the deduction is given, which is attributable, as the case may be, to the income or the property (capital) which may be taxed in India. 4.     The tax payable in the Contracting State mentioned in paragraphs 2 and 3 of this Article shall be deemed to include the tax which would have been payable but for the tax incentives granted under the laws of the Contracting State and which are designed to promote economic development. 5.     Income which in accordance with the provisions of this Agreement, is not to one subjected to tax in a Contracting State, may be taken into account for calculating the rate of tax to be imposed in that Contracting State. Article 25 NON-DISCRIMINATION 1.     Nationals of a Contracting State shall not be subjected in the other Contracting State, to other or more burdensome taxation or any requirement connected therewith, than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. 2.     The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which an enterprise of the other Contracting State, has in the first-mentioned State at a rate of tax which is higher than that imposed on the profits of a similar enterprise of the first-mentioned Contracting State, nor as being in conflict with the provisions of paragraph 3 of Article 7 of this Agreement. 3.     Nothing contained in this Article shall be construed as obliging a Contracting State to grant to persons not resident in that State any personal allowances, reliefs, reductions and deductions for taxation purposes which are by law available only to persons who are so resident. 4.     Enterprises of a Contracting State the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State may be subjected in the same circumstances and under the same conditions. 5.     In this Article, the term "taxation" means taxes which are the subject of this Agreement. 6.     Except where the provisions of Article 9, paragraph 7 of Article 11 of paragraph 7 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other contracting State shall, for the purpose of determining the taxation profits of such enterprises, be deductible under the same conditions as if they had been paid to a resident of the first mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxation capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State. Article 26 MUTUAL AGREEMENT PROCEDURE 1.     Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may, irrespective of the remedies provided by the domestic laws of those Contracting States, present his case to the competent authority of the Contracting State of which he is a resident, or of his case comes under paragraph 1 of Article 25, to that of the Contracting State of which he is a national. The case must be presented within three years from the date of the first notification of the action resulting in taxation not in accordance with the provisions of this Agreement. 2.     The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State for the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach an agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. Article 27 EXCHANGE OF INFORMATION 1.     The competent authorities of the Contracting States shall exchange such information (including domestic) as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, in so far as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment, or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. The competent authorities shall, through consultation, develop appropriate conditions, methods and techniques, the list of information and documents concerning the matters in respect of which such exchange of information shall be made, including, where appropriate, exchange of information regarding tax avoidance. The exchange of information or documents shall be on request of the competent authorities of the Contracting States. 2.     In no case shall the provisions of paragraph 1 be construed as to impose on a Contracting State the obligation: a.     to carry out administrative measures at variance with the law or administrative practice of that or the other Contracting State; b.    to supply information or domestic which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c.     (to supply information or documents which would disclose any trade, business, industrial, commercial or professional secret, or trade process, or information, the disclosure of which would be contrary to public policy. Article 28 ASSISTANCE IN COLLECTION 1.     The Contracting States undertake to lend assistance and support to each other, in the collection of the taxes to which this Agreement relates, in the cases where the taxes are definitely due according to the laws of the State making the request. 2.     In the case of a request for enforcement of collection, tax claims of either of the Contracting States which have been finally determined will be accepted for enforcement by the other Contracting State to,-which the request is made and collected in that State in accordance with the laws applicable to the enforcement and collection of its taxes. 3.     In the case of Indian tax, the request will be sent by the Central Board of Direct Taxes, Department of Revenue to the State Tax Committee of the Republic of Belarus and will be accompanied by such certificate as is required by the laws of India to establish that the taxes have been finally determined and are due from the taxpayer. 4.     In the case of Belarusian tax, the request will be sent by the State Tax Committee of the Republic of Belarus to the Central Board of Direct Taxes, Department of Revenue, in India and will be accompanied by such certificate as is required by the laws of the Republic of Belarus to establish that the taxes have been finally determined and are due from the taxpayer. 5.     Where that tax claim has not become final by reason of its being subject to appeal or any other proceeding, a Contracting State may, in order to protect its revenues, request the other Contracting State to take such interim measures in this behalf as are lawful under the laws of that other Contracting State. 6.     A request for assistance in collection of taxes due from a taxpayer shall be made only if adequate assets of that taxpayer are not available for recovering the taxes from him in the Contracting State making the request. 7.     The Contracting State in which tax is recovered in pursuance of paragraphs 1, 2 and 5 of this Article shall immediately thereafter remit the amount so recovered to the Contracting State which made the request but it shall be entitled to reimbursement of actual costs, if any, incurred in the course of rendering assistance to the extent mutually agreed between the competent authorities of the Contracting States. Article 29 DIPLOMATIC AND CONSULAR OFFICIALS Nothing in this Agreement shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements. Article 30 ENTRY INTO FORCE 1.     The Contracting States shall notify each other in writing, through diplomatic channels, the completion of the procedure required by the respective laws for the entry into force of this Agreement. 2.     This Agreement shall enter into force thirty days after the receipt of the later of the notifications referred to in paragraph 1 of this Article. 3.     The provisions of this Agreement shall have effect: a.     In India:

Download Word Document In English. (Rs.90/-) Belgium Double Taxation Avoidance Agreement Belgium Income-tax Act, 1961: Notification under section 90: Agreement between the Republic of India and the Government of the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income Notification No. G. S. R. No. 632(E), dated 31st October, 1997. Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has come into force on the 1st day of October, 1997, the thirtieth day after the receipt of later of notifications by both the Contracting States to each other of the completion of the procedures required for bringing into force of the said Agreement in accordance with paragraph 1 of Article 29 of the said Agreement; Now, therefore, in exercise of the powers conferred under section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE KINGDOM OF BELGIUM FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Kingdom of Belgium, Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows: CHAPTER I SCOPE OF THE AGREEMENT Article 1 PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1.     This Agreement shall apply to all taxes imposed on total income or on elements of income including taxes on gains from the sale, exchange or transfer of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises. The term "taxes" shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which the Agreement applies or which represents a penalty imposed relating to those taxes. 2.     The existing taxes to which the Agreement shall apply are:-- a.     In the case of India:                       i.        the income-tax including any surcharge thereon; and                      ii.        the surtax, (hereinafter referred to as "Indian tax"). b.            In the case of Belgium:                               i.        the individual income-tax (l'impot des personnes physiques de personenbelasting);                              ii.        the corporate income-tax (l'impot des societes; de vennootschapsbelasting);                             iii.        the income-tax on legal entities (l'impot des personnes morales; de rechtspersonenbelasting);                             iv.        the income tax on non-residents (l'impot des non-residents de belasting der niet-verblijfhouders);                              v.        the special levy assimilated to the individual income-tax (la cotisation speciale assimilee a l'impot des personnes physiques; de met de personenbelasting gelijkgestelde bijzondere heffing), including the prepayments, the surcharges on these taxes and prepayments, and the supplements to the individual income-tax, (hereinafter referred to as "Belgian tax"). 3.     The Agreement shall also apply to any identical or substantially similar tax which is imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall, from time to time, notify to each other any significant changes which have been made in their respective taxation laws. CHAPTER II DEFINITIONS Article 3 GENERAL DEFINITIONS 1.             In this Agreement, unless the context otherwise requires:- a.     the term " India " means the Territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law b.    the term "Belgium" means the Kingdom of Belgium when used in a geographical sense, it means the national territory, the territorial sea and any other area in the sea within which Belgium, in accordance with international law, exercises sovereign rights or its jurisdiction; c.     the terms "a Contracting State" and "the other Contracting State" mean India or Belgium as the context requires; d.    the term "competent authority" means:--                                               i.          in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative, and                                              ii.          in the case of Belgium, the Minister of Finance or his authorised representative; e.     the term "tax" means "Indian tax" or "Belgian tax" as the context requires; f.     the term "person" includes an individual, a company and any other entity which is treated as a taxable unit under the tax laws in force in the Contracting State of which it is a resident; g.    the term "company" means in the case of India any entity which is a company or which is treated as a company under the Indian tax law, and in the case of Belgium any entity which is a company or which is treated as a body corporate under the Belgian tax law; h.     the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; i.      the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; j.      the term "national" means:-                               i.        any individual possessing the nationality of a Contracting State;                              ii.        any legal person, partnership and association deriving its status as such from the laws in force in a Contracting State. As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Agreement applies. Article 4 RESIDENT 1.     For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is a resident of that State for the purposes of the taxes of that State to which the Agreement applies. 2.     2 Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his residential status for the purposes of the Agreement shall be determined in accordance with the following rules:-- a. he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (hereinafter referred to as his "centre of vital interests"); b.if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c. if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; d.if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall determine the question by mutual Agreement. 3.     Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 1.      For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2.      The term "permanent establishment" includes especially: a.     a place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop or a warehouse; f.     a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; g.    an installation or structure used for the exploration or exploitation of natural resources; h.     the provision of services or facilities in connection with or supply of plant and machinery on hire used or to be used in, the prospecting for, or extraction or production of mineral oils; i.      a premises used as a sales outlet or for receiving or soliciting orders; j.      a building site or construction, installation or assembly project or supervisory activities in connection therewith, where such site, project or activities (together with other such sites, projects or activities, if any) continue for a period of more than six months, or where such project or supervisory activity, being incidental to the sale of machinery or equipment, continues for a period not exceeding six months and the charges payable for the project or supervisory activity exceed 10 per cent. of the sale price of the machinery and equipment. 3.      The term "permanent establishment" shall not be deemed to include:-- a.     the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; c.     the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; d.    the maintenance of a fixed place of business solely for scientific research, for the enterprise. 4.             Subject to the provisions of paragraph 5, a person acting in a Contracting State on behalf of an enterprise of the other Contracting State shall be deemed to have a permanent establishment of that enterprise in the first-mentioned State if:-- a.     he has and habitually exercises, in that State an authority to conclude contracts on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for that enterprise; or b.    he habitually maintains in the first-mentioned Contracting State a stock of goods or merchandise belonging to the enterprise from which the person regularly delivers goods or merchandise on behalf of the enterprise; or c.     he habitually secures orders in the first-mentioned Contracting State, exclusively or almost exclusively, for the enterprise itself, or for the enterprise and other enterprises which are controlled by it or have a controlling interest in it. 5.       An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise itself or on behalf of that enterprise and other enterprises controlling, controlled by, or subject to the same common control, as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. 6.       The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise) shall not of itself constitute either company a permanent establishment of the other. CHAPTER III TAXATION OF INCOME Article 6 INCOME FROM IMMOVABLE PROPERTY 1.             Income from immovable property may be taxed in the Contracting State in which such property is situated. 2.             The term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources. Ships and aircraft shall not be regarded as immovable property. 3.             The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.             The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services. Article 7 BUSINESS PROFITS 1.     The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to (a) that permanent establishment; (b) sales in that other State of goods or merchandise of the same or similar kind as those sold through that permanent establishment; or (c) other business activities carried on in that other State of the same or similar kind as those effected through that permanent establishment. 2.     Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall be attributed to such permanent establishment the profits which it might be expected to derive if it were an independent enterprise engaged in the same or similar activities under the same or similar conditions and dealing at arm's length with the enterprise of which it is a permanent establishment. 3.       a.     In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, subject to the limitations of the taxation laws of that State: Provided that where the law of the State in which the permanent establishment is situated imposes a restriction on the amount of the executive and general administrative expenses which may be allowed, and that restriction is relaxed or overridden by any Convention or Agreement between that State and a third State which is a member of the OECD which enters into force after the date of entry into force of this Agreement, the competent authority of that State shall notify the competent authority of the other Contracting State of the terms of the corresponding paragraph in the Convention or Agreement with that third State immediately after the entry into force of that Convention or Agreement and, if the competent authority of the other Contracting State so requests, the provisions of this sub-paragraph shall be amended by protocol to reflect such terms. b.    However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged (otherwise than towards reimbursement of actual expenses), by the permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission or other charges for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices. 4.     In so far as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 or paragraph 3 shall preclude such Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles laid down in this article. 5.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the purpose of export to the enterprise of which it is the permanent establishment. 6.     For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 7.     Where profits include items of income which are dealt with separately in other articles of this Agreement, then the provisions of those articles shall not be affected by the provisions of this article. Article 8 SHIPPING AND AIR TRANSPORT 1.             Income derived from the operation of ships or aircraft in international traffic by an enterprise of a Contracting State shall not be taxed in the other Contracting State. 2.             For the purposes of this article:-- a.     interest on funds directly connected with the operation of ships or aircraft in international traffic shall be regarded as income from the operation of such ships or aircraft and the provisions of Article 11 shall not apply in relation to such interest; accordingly there will be no withholding tax on such income; b.    income derived from the operation of ships or aircraft in international traffic shall mean income derived by an enterprise described in paragraph I from the transportation by sea or air respectively of passengers, mail, livestock or goods carried on by the owners or lessees or charterers of ships or aircraft including--                               i.        the sale of tickets for such transportation on behalf of other enterprises;                              ii.        any other activity directly connected with such transportation;                             iii.        the leasing of ships or aircraft on charter fully equipped, manned and supplied, or on a bare boat charter basis where the leasing is incidental to any activity directly connected with such transportation; c.     income derived from the operation of ships in international traffic, includes income derived from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) in connection with the transportation of goods or merchandise in international traffic, where the income is derived from an activity which is incidental to any activity directly connected with such transportation. 3.             The provisions of this article shall also apply to income from the participation in a pool, a joint business or an international operating agency. Article 9 ASSOCIATED ENTERPRISES Where- a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Article 10 DIVIDENDS 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the order Contracting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 15 per cent. of the gross amount of the dividends. 3.     This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 4.     The term "dividends" as used in this article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. This term means also income, even paid in the form of interest-derived from capital invested by the members of a company other than a company with share capital, which is a resident of Belgium. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 6.     Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except in so far as such dividends are paid to a resident of that other State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 INTEREST 1.             Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.             However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State the tax so charged shall not exceed:                                           i.    10 per cent. of the gross amount of the interest, if such interest is paid on any loan of whatever kind granted by a bank; and                                          ii.    15 per cent. of the gross amount of the interest in all other cases. 3.             The term "interest" as used in this article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, however, the term "interest" shall not include for the purpose of this article interest regarded as dividends under the second sentence of paragraph 3 of Article 10. 4.             The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 5.             Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 6.             Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State. Article 12 ROYALTIESAND FEES FOR TECHNICAL SERVICES 1.     Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the beneficial owner of the royalties or fees for technical services is a resident of the other Contracting State, the tax so charged shall not exceed 20 per cent. of the gross amount of the royalties or fees for technical services. 3.       a. The term "royalties" as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, or films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience. b.the term "fees for technical services" as used in this article means payments of any kind to any person, other than payments to an employee of the person making the payments and to any individual for independent personal services mentioned in Article 14, in consideration for services of a managerial, technical or consultancy nature, including the provision of services of technical or other personnel. 4.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which, or the contract under which, the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 5.     Royalties and fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to make the payments was incurred and the payments are borne by such permanent establishment or fixed base, then the royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 6.     Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties or fees for technical services, having regard to the use, right, information or technical services for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this article shall apply only to the last-mentioned amount. In such case, the excess part of the royalties or fees for technical services shall remain taxable according to the laws of each Contracting State. Article 13 CAPITAL GAINS 1.     Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State. 2.     Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other State. 3.     Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident. 4.     Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 5.     Gains from the alienation of shares other than those mentioned in paragraph 4, forming part of a participation of at least 10 per cent. of the capital stock of a company which is a resident of a Contracting State may be taxed in that State. 6.     Gains from the alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 INDEPENDENT PERSONAL SERVICES 1.             Income derived by an Individual who is a resident of a Contracting State from the performance of professional services or other independent activities of a similar character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State:- a. if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or b.if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in the relevant previous year" or "taxable period", as the case may be; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State.2 2.     The term "professional services" includes independent scientific, literary, artistic, educational or teaching activities, as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. Article 15 DEPENDENT PERSONAL SERVICES 1.             Subject to the provisions of Articles 16, 17, 18, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State. 2.             Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:-- a. the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant "previous year" or "taxable period", as the case may be; b.the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and c. the remuneration is not deductible in computing the profits or income of a permanent establishment or a fixed base which the employer has in the other State. 3.             Notwithstanding the preceding provisions of this article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State. Article 16 DIRECTORS' FEES 1.             Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or a similar organ of a company which is a resident of the other Contracting State may be taxed in that other State. This provision shall also apply to payments derived in respect of the discharge of functions which under the laws of the Contracting State of which the company is a resident are treated as functions analogous to those stated hereinbefore. 2.             Remuneration derived by a director referred to in paragraph 1 from the company in regard to the discharge of day-to-day functions of a managerial or technical nature and remuneration received by a resident of a Contracting State consequent to some personal activity as a partner of a company, other than a company having a share capital which is a resident of the other Contracting State, may be taxed in accordance with the provisions of paragraph 1 of Article 15, as if such remuneration were derived in respect of an employment. Article 17 INCOME EARNED BY ENTERTAINERS AND ATHLETES 1.             Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2.             Where income in respect of personal activities exercised by an entertainer or athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3.             Notwithstanding the provisions of paragraph 1, income derived by an entertainer or an athlete who is a resident of a Contracting State from his personal activities as such exercised in the other Contracting State, shall be taxable only in the first-mentioned Contracting State, if the activities in the other Contracting State are supported wholly or substantially from the public funds of the first-mentioned Contracting State, including any of its political sub-divisions or local authorities. 4.             Notwithstanding the provisions of paragraph 2 and of Articles 7, 14 and 15, where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such in a Contracting State accrues not to the entertainer or athlete himself but to another person, that income shall be taxable only in the other Contracting State, if that other person is a resident of that other Contracting State and is supported wholly or substantially from the public funds of that other State, including any of its political sub-divisions or local authorities. Article 18 NON-GOVERNMENT PENSIONS AND ANNUITIES 1.             Any pension, other than a pension referred to in Article 19, or any annuity derived by a resident of a Contracting State from sources within the other Contracting State shall be taxable only in the first-mentioned Contracting State. 2.             Notwithstanding the provisions of paragraph 1, pensions paid and other payments made under a public scheme which is part of the social security system of a Contracting State or a political sub-division or a local authority thereof shall be taxable only in that State. 3.             The term "pension" means a periodic payment made in consideration of past services, or by way of compensation for injuries received in the course of performance of services. 4.             The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth. Article 19 REMUNERATION AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE 1.       a.     Remuneration, other than a pension, paid by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:-                       i.        is a national of that State; or                      ii.        did not become a resident of that State solely for the purpose of rendering the services. 2.   a.     Any pension paid by, or out of funds created by, a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State. 3.     The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political sub-division or a local authority thereof. Article 20 TEACHERS AND RESEARCHERS 1.             An individual who is a resident of a Contracting State and who, at the invitation of the Government of the other Contracting State or of a university or other recognised educational institution situated in that other Contracting State, visits such other Contracting State for the primary purpose of teaching or engaging in research, or both, at a university or other recognised educational institution shall not be subject to tax by that other Contracting State on his income from personal services for such teaching or research for a period not exceeding twenty-four months from the date of his arrival in that other Contracting State. 2.             This article shall not apply to income from personal services for research if such research is undertaken primarily for the private benefit of a specific person or persons. 3.             For the purposes of this article and Article 21, an individual shall be deemed to be a resident of a Contracting State if he is a resident of that Contracting State in the year in which he visits the other Contracting State or in the year immediately preceding that year. Article 21 PAYMENTS RECEIVED BY STUDENTS AND APPRENTICES 1.             An individual who is a resident of a Contracting State and visits the other Contracting State solely:- a.     as a student at a university, college or other recognised educational institution in that other Contracting State, or b.    as a business apprentice, or c.     for the purpose of study or research, as a recipient of a grant, allowance or award, from a governmental, religious, charitable, scientific or educational Organisation, shall be exempt from tax in that other Contracting State,                                       i.        on all remittances from abroad for the purposes of maintenance, education or training;                                      ii.        on the grant, allowance or award; and                                     iii.        in respect of the amount, representing remuneration for an employment in that other Contracting State, if such remuneration does not exceed 100,000 Belgian Francs or its equivalent in Indian rupees, as the case may be, in any year. 2.             An individual who is a resident of a Contracting State and who visits the other Contracting State for a period not exceeding one year as an employee of, or under contract with, an enterprise of the first-mentioned Contracting State or an Organisation referred to in paragraph 1 for the primary purpose of acquiring technical, professional or business experience from a person other than such enterprise or Organisation shall be exempt from tax in that other Contracting State in respect of the remuneration received from that enterprise or Organisation for such period, if such remuneration does not exceed 120,000 Belgian Francs or its equivalent in Indian rupees, as the case may be, in any year. Article 22 OTHER INCOME 1.             Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing articles of this Agreement shall be taxable only in that State. 2.             The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 3.             Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing articles of the Agreement and arising in the other Contracting State may also be taxed in that other State. CHAPTER IV METHODS FOR ELIMINATION OF DOUBLE TAXATION Article 23 ELIMINATION OF DOUBLE TAXATION 1.             The laws in force in either of the Contracting States will continue to govern the assessment and taxation of income in the respective Contracting States except where express provision to the contrary is made in this Agreement. 2.             In the case of India, double taxation shall be avoided as follows:- a.     Where a resident of India derives income which, in accordance with the provisions of the Agreement, may be taxed in Belgium, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Belgium whether directly or by deduction. Such deduction shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable to the income which may be taxed in Belgium. Further, where such resident is a company by which surtax is payable in India, the deduction in respect of income-tax paid in Belgium shall be allowed in the first instance from income-tax payable by the company in India and as to the balance, if any, from surtax payable by it in India. b.    Where a resident of India derives income which, in accordance with the provisions of the Agreement, shall be taxable only in Belgium, India may include this income in the tax base but shall allow as a deduction from the income-tax that part of the income-tax which is attributable to the income derived from Belgium. 3.     In the case of Belgium, double taxation shall be avoided as follows:- a.     Where a resident of Belgium, derives income which may be taxed in India in accordance with the provisions of the Agreement, other than those of paragraph 2 of Article 10, of paragraphs 2 and 6 of Article 11 and of paragraphs 2 and 6 of Article 12, Belgium shall exempt such income from tax but may, in calculating the amount of tax on the remaining income of that resident, apply the rate of tax which would have been applicable if such income had not been exempted. b.                                                i.    Where a resident of Belgium derives items of his aggregate income for Belgian tax purposes which are dividends taxable in accordance with paragraph 2 of Article 10, and not exempt from Belgian tax according to sub-paragraph (c), interest taxable in accordance with paragraph 2 or 6 of Article 11, or royalties taxable in accordance with paragraph 2 or 6 of Article 12, the Indian tax levied on that income shall be allowed as a credit against Belgian tax relating to such income in accordance with the existing provisions of Belgian law regarding the deduction from Belgian tax of taxes paid abroad.                                          ii.    Where a resident of Belgium derive; fees for technical services which have been taxed in India in accordance with paragraph 2 or 6 of Article 12, the provisions of Belgian tax law with respect to earned income derived from sources outside Belgium and subject to foreign tax shall apply. c.     Where a company which is a resident of Belgium owns shares in a company which is a resident of India, the dividends which are paid to it by the latter company and which may be taxed in India in accordance with paragraph 2 of Article 10, shall be exempt from the corporate income-tax in Belgium under the conditions and limits provided for in Belgian law. d.    Where in accordance with Belgian law, losses incurred by an enterprise carried on by a resident of Belgium in a permanent establishment situated in India have been effectively deducted from the profits of that enterprise for its taxation in Belgium, the exemption provided for in sub-paragraph (a) shall not apply in Belgium to the profits of other taxable periods attributable to that establishment to the extent that those profits have also been exempted from tax in India by reason of compensation for the said losses. e.     For the purposes of sub-paragraph (b)(i) the term "Indian tax levied" shall be deemed to include any amount which would have been payable as Indian tax under the laws of India and in accordance with the provisions of the Agreement for any year but for a deduction allowed in computing the taxable income or an exemption from or a reduction of tax granted for that year under                                           i.    sections 10(4), 10(4B), 10(15)(iv) and 80L of the Income-tax Act, 1961 (43 of 1961), so far as they were in force on, and have not been modified since, the date of the signature of the Agreement, or have been modified only in minor respects so as not to affect their general character; or                                          ii.    any other provision which may be enacted after the Agreement enters into force granting a deduction in computing the taxable income or an exemption from or a reduction of tax and which the competent authorities of the Contracting States agree to be for the purposes of economic development of India, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character; the competent authorities may in such a case decide as to the period for which the benefit of this clause shall apply. CHAPTER V SPECIAL PROVISIONS Article 24 NON-DISCRIMINATION 1.             Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be taxed. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. 2.             Subject to the provisions of paragraph 3 of Article 7, the taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances or under the same conditions. 3.             The provisions of paragraph 2 shall not be construed as preventing:- a. a Contracting State from charging the profits of a permanent establishment which an enterprise of the other Contracting State has in the first-mentioned State at a rate of tax which is higher than that imposed on the profits of a similar enterprise of the first-mentioned Contracting State; b.Belgium from imposing the movable property prepayment on dividends paid to a permanent establishment in Belgium of a company which is a resident of India. 4.     Nothing contained in this article shall be construed as obliging a Contracting State to grant to persons not resident in that State any personal allowances, reliefs or reductions for tax purposes which are by law available only to persons who are so resident. 5.     Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirement to which other similar enterprises of that first mentioned State are or may be subjected in the same circumstances and under the same conditions. 6.     In this article, the term "taxation" means taxes of every kind as specified in this Agreement. Article 25 MUTUAL AGREEMENT PROCEDURE 1.             Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within two years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement. 2.             The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement: Provided that the case has been presented within the time period specified in paragraph 1, any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting State. 3.             The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. 4.             The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of the Agreement. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. Article 26 EXCHANGE OF INFORMATION 1.             The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement, in so far as the taxation thereunder is not contrary to the Agreement, in particular for the prevention of fraud or evasion of such taxes. The exchange of information is not restricted by article 1. Any

Download Word Document In English. (Rs.85/-) Malaysia Notification No. 1705/F. No. 11(43)/46-FTD dt. 1-4-1977. G.S.R. 167(E).----Whereas the Government of India and the Government of Malaysia have concluded an Agreement, as set out in the Annexure hereto, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income; And where as all the requirements have been completed in Malaysia and India as are necessary to give the said Agreement the force of law in Malaysia and India respectively, as required by paragraph 1 of Article 27 of the said Agreement; And whereas the diplomatic notes of this effect have been exchanged between the said two Governments, as required by paragraph 2 of Article 27 of the said Agreement; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF MALAYSIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of India and the Government of Malaysia, Desiring to conclude an Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income. Have agreed as follows: CHAPTER I SCOPE OF THE AGREEMENT ARTICLE I Personal Scope This Agreement shall apply to persons who are residents of one of both of the Contracting States. ARTICLE II Taxes covered 1.     The taxes which are the subject of this Agreement are: a.     in Malaysia:                       i.        the income-tax;                      ii.        the supplementary income-tax, that is, tin profits tax, development tax and timber profits tax; and                     iii.        the petroleum income-tax; (hereinafter referred to as "Malaysian tax"); b.    in India:                       i.        the income-tax and any surcharge on income-tax imposed under the Income-tax Act, 1961 (43 of 1961);                      ii.        the surtax imposed under Companies (Profits) surtax Act, 1964 (7 of 1964), (hereinafter referred to as "Indian tax"). 2.     The Agreement shall also apply to any other taxes of a substantially similar character to those referred to in the preceding paragraph imposed in either Contracting State after the date of signature of this Agreement. 3.     At the end of each year, the competent authorities of the Contracting States shall notify to each other any significant changes which have been made in their respective taxation laws. CHAPTER II DEFINITIONS ARTICLE III General Definitions 1.     In this Agreement, unless the context otherwise requires:---- a.     the term "Malaysia" means the Federation of Malaysia and includes any area adjacent to the territorial waters of Malaysia which, in accordance with international law, has been or may hereafter be designated under the laws of Malaysia concerning the Continental Shelf as an area within which the rights of Malaysia with respect to the sea bed and sub-soil and their natural resources may be exercised; b.    the term "India" means the territory of India and includes any area adjacent to the territorial waters of India which, in accordance with international law, has been or may hereafter be designated under the laws of India as an area within which the rights of India with respect to the sea bed and sub-soil and their natural resources may be exercised; c.     the terms "one of the Contracting States" and "the other Contracting State" means Malaysia or India, as the context requires; d.    the term "tax" means Malaysian tax or Indian tax, as the context requires; e.     the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes under the taxation laws of the respective Contracting States; f.     the term "person" shall have the meaning assigned to it in the taxation laws in force in the respective Contracting States; g.    the terms "Malaysian enterprise" and "Indian enterprise" mean respectively an enterprise carried on by a resident of Malaysia and an enterprise carried on by a resident of India; h.     the terms "enterprise of one of the Contracting States" and "enterprise of the other Contracting State" mean a Malaysian enterprise or an Indian enterprise, as the context requires; i.      the term "competent authority" means, in the case of Malaysia, the Minister of Finance or his authorised representative; and in the case of India, the Central Government in the Ministry of Finance (Department of Revenue and Insurance). 2.     In the application of this Agreement by one of the Contracting States any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the tax which are the subject of this Agreement. ARTICLE IV Fiscal Domicile 1.     In this Agreement, unless the context otherwise requires:---- a.     the term "resident of Malaysia" means                       i.        an individual who is ordinarily resident in Malaysia; or                      ii.        a person other than individual who is resident in Malaysia; for the basis year for a year of assessment for the purpose of Malaysian tax; b.    the term "resident of India" means a person who is treated as a resident of India in the previous year for the relevant assessment year for the purpose of Income-tax; c.     the terms "resident of one of the Contracting States" and "resident of the other Contracting State" mean a resident of Malaysia or a resident of India, as the context requires. 2.     Where by reason of the provisions of paragraph 1 of this Article an individual is a resident of both Contracting States, then his residential status shall be determined in accordance with the following rules: a.     he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer; b.    if the Contracting State, with which his personal and economic relations are closer cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c.     if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a citizen; d.    if he is a citizen of both Contracting States or of neither of them, the competent authorities of the Contracting States shall determine the question by mutual agreement. 2.     Where by reason of the provisions of paragraph 1 of this Article a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. ARTICLE V Permanent Establishment 1.     For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on. 2.     The term "permanent establishment" shall include especially: a.     a place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop; f.     a warehouse; g.    a mine, oil well, quarry or other place of extraction of natural resources; h.     a building site or construction, installation or assembly project which exists for more than six months; i.      a farm or plantation; j.      a place of extraction of timber or forest produce. 3.     The term "permanent establishment" shall not be deemed to include: a.     the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; c.     the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or collecting information, for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which has a preparatory or auxiliary character, for the enterprise. 4.     An enterprise of one of the Contracting States shall be deemed to have a permanent establishment in the other Contracting State if: a.     it carries on supervisory activities in that other Contracting State for more than six months in connection with a construction, installation or assembly project which is being undertaken in that other Contracting State; b.    it carries on a business which consists of providing the services of public entertainers (such as stage, motion picture, radio or television artistes and musicians) or athletes in that other Contracting State unless the enterprise is directly or indirectly supported, wholly or substantially, from the public funds of the Government of the first-mentioned Contracting State in connection with the provision of such services. 2.     Subject to the provisions of paragraph 6 of this Article, a person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State shall be deemed to be a permanent establishment in the first-mentioned Contracting State if: a.     he has, and habitually exercises in that first-mentioned Contracting State, an authority to conclude contracts on behalf of the enterprise unless his activities are limited to the purchase of goods or merchandise for the enterprise; or b.    he maintains in the first-mentioned Contracting State a stock of goods or merchandise belonging to the enterprise from which he regularly fills orders on behalf of the enterprise. 3.     An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other Contracting State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. 4.     The fact that a company which is a resident of one of the Contracting States controls or is controlled by a company which is a resident of the other Contracting State or which carries on business in that other Contracting State whether through a permanent establishment or otherwise shall not of itself constitute either company a permanent establishment of the other. CHAPTER III TAXATION ON INCOME ARTICLE VI Income from Immovable Property 1.     Income from immovable property may be taxed in the Contracting State in which such property is situated. 2.     The term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oil wells, quarries and other places of extraction of natural resources or of timber or forest produce. Ships, boats and aircraft shall not be regarded as immovable property. 3.     The provisions of paragraph 1 of this Article shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraph 1 and 3 of this Article shall also apply to the income from immovable property of an enterprise. ARTICLE VII Business Profits 1.     The income or profits of an enterprise of one of the Contracting States shall be taxable only in that Contracting State, unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, tax may be imposed in that other Contracting State on the income or profit of the enterprise but only on so much of that income or profit as is attributable to that permanent establishment. 2.     Where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall be in each Contracting State be attributed to that permanent establishment the income or profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 3.     In the determination of the income or profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. 4.     In so far as it has been customary in a Contracting State to determine the income or profits to be attributed to a permanent establishment on the basis of an apportionment of the total income or profits of the enterprise to its various parts, nothing in paragraph 2 or paragraph 3 of this Article shall preclude such Contracting State from determining the income or profits to be taxed by such an apportionment as may be cutomary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles laid down in this Article. 5.     No income or profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the purpose of expert to the enterprise of which it is the permanent establishment. 6.     Where income or profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. ARTICLE VIII Shipping 1.     Income of an enterprise of one of the Contracting States derived from the other Contracting State from the operation of ships in international traffic may be taxed in that other Contracting State, but the tax chargeable in that Contracting State on such income shall be reduced by an amount equal to fifty per cent of such tax. 2.     For the purposes of paragraph 1 of this Article income derived from the other Contracting State shall mean income from the carriage of passengers, mail, livestock or goods shipped in that other Contracting State: Provided that there shall be excluded the income accruing from the carriage of passengers, mail, livestock or goods which are brought to that other Contracting State solely for transhipment or for transfer from an aircraft to a ship or from a ship to another ship. 3.     Where income from the operation of ship in international traffic is derived by an enterprise of one of the Contracting States from a State other than the Contracting States, such income shall be taxable only in the Contracting State of which the interprise is a resident. 4.     The provisions of paragraphs 1, 2 and 3 of this Article shall likewise apply to income arising from participation in shipping pools of any kind by such enterprise engaged in shipping operations. ARTICLE IX Air Transport 1.     Income of an enterprise of one of the Contracting States derived from the other Contracting State from the operation of aircraft in international traffic shall not be taxed in the other Contracting State. 2.     For the purposes of paragraph 1 of this Article, income derived from the other Contracting State shall mean income from the carriage of passengers, mail, livestock or goods from the other Contracting State. 3.     Where income from the operation of aircraft in international traffic is derived by an enterprise of one of the Contracting States from a State other than the Contracting States, such income shall be taxable only in the Contracting State of which the enterprise is a resident. 4.     The provisions of paragraphs 1, 2 and 3 of this Article shall likewise apply, to income arising from participation in aircraft pools of any kind by such enterprise engaged in air transport operations. ARTICLE X Associated Enterprises Where---- a.     an enterprise of one of the Contracting States participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of one of the Contracting States and of an enterprise of other Contracting State; and in either case, conditions are made or imposed between the two enterprises in their commercial or financial relations, which differ from those which would be made between independent enterprises, then any income or profits which would but for those conditions have accrued to one of the enterprises, but by reason of those conditions have not so accrued, may be included in the income or profits of that enterprise and taxed accordingly. ARTICLE XI Dividends 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in the first-mentioned Contracting State. 2.     Where a dividend was paid by a company which was resident in both Malaysia and Singapore and the meeting at which the dividend was declared was held in Malaysia, or where a dividend was paid by a company which was resident in Singapore and at the time of payment of that dividend the company declared itself to be a resident of Malaysia for the purposes of Article VII of the Agreement between the Government of Malaysia and the Government of the Republic of Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed in Singapore on 26th December, 1968, the dividend shall be deemed to have been paid by a company resident in Malaysia. 3.     Where a dividend was paid by a company which was resident in both Malaysia and Singapore and the meeting at which the dividend was declared was held in Singapore, or where a dividend was paid by a company which was resident in Malaysia and at the time of payment of that dividend, the company declared itself to be a resident of Singapore for the purposes of Article VII of the Agreement between the Government of Malaysia and the Government of the Republic of Singapore for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed in Singapore on 26th December, 1968, the dividend shall be deemed to have been paid by a company not resident in Malaysia. 4.     Nothing in this Article shall affect the provisions of the law in Malaysia under which the tax in respect of a dividend paid by a company resident in Malaysia from which Malaysian tax has been, or has been deemed to be, deducted may be adjusted by reference to the rates of tax appropriate to the year of assessment immediately following that in which the dividend was paid. 5.     Where a company which is a resident of one of Contracting States derives income or profits from sources within the other Contracting State, there shall not be imposed in that other Contracting State any form of taxation on dividends paid by the company to persons not resident in that other Contracting State any form of taxation on dividends paid by the company to persons not resident in that other Contracting State or any tax in the nature of an undistributed profits tax on the undistributed profits of the company, whether or not those dividends represent, in whole or in part, income or profits so derived. ARTICLE XII Interest 1.     Interest derived by a resident of one of the Contracting States from the other Contracting State may be taxed in that other Contracting State. 2.     Interest shall be deemed to be derived from a Contracting State if the payer is the Government, a State Government, a political sub-division, a local authority or a resident of that Contracting State. Where, however, the payer has in the other Contracting State a permanent establishment with which the loan or other indebtedness in respect of which the interest is paid, is effectively connected and such interest is borne by such permanent establishment, then such interest shall be deemed to be derived from the Contracting State in which the permanent establishment is situated. In such a case, the provisions of Article 7 shall apply. 3.     Where, owing to a special relationship between the payer and the recipient, or between both of them and some other persons, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall be taxed according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. 4.     The term "interest" as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the State in which the income arises. ARTICLE XIII Royalties 1.     Royalties derived by a resident of one of the Contracting State from the other Contracting State may be taxed in that other Contracting State. 2.     Notwithstanding the provisions of paragraph 1 of this Article, royalties of the kind mentioned in clauses (a) and (b) of paragraph 5 of this Article and derived from Malaysia by a resident of India shall be exempt from tax in Malaysia, if the agreement under which such royalties are payable is approved by the Government of Malaysia after this Agreement is signed. 3.     Royalties shall be deemed to be derived from a Contracting State if the payer is the Government, a State Government, a political sub-division, a local authority or a resident of that Contracting State. Where, however, the payer has in the other Contracting State a permanent establishment with which the right or property giving rise to the royalties is effectively connected, then, such royalties shall be deemed to be derived from the Contracting State in which the permanent establishment is situated. In such a case, the provisions of Article 7 shall apply. 4.     Where, owing to a special relationship between the payer and the recipient, or between both of them and some other person, the amount of the royalties having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall be taxed according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. 5.     The term "royalties" as used in this Article means payment of any kind received as a consideration for the use of, or the right to use--- a.     any patent, trademark design or model, plan, secret formula or process; b.    industrial, commercial, or scientific equipment, or information concerning industrial, commercial or scientific experience c.     any copyright of literary, artistic or scientific work, cinematograph films, or tapes for television or broadcasting. but does not include royalties or other amounts paid in respect of operation of mines or quarries or of the extraction or removal of natural resources. ARTICLE XIV Dependent Personal Services 1.     Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other similar remuneration derived by a resident of one of the Contracting States in respect of an employment shall be taxable only in that Contracting State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other Contracting State. 2.     Notwithstanding the provisions of paragraph 1 of this Article, an individual who is a resident of Malaysia shall be exempt from tax in India on remuneration in respect of an employment exercised in any previous year in India, if----- a.     he is present in India for a period or periods not exceeding in the aggregate 183 days during that previous year; and b.    any period for which he is present within India does not form part of a continuous period of more than 183 days throughout which he is present within India; and c.     the remuneration is paid by, or on behalf of, an employer who is not a resident of India; and d.    the amount of remuneration is not deductible in computing the income or profits of an enterprise chargeable to Indian tax. 3.     Notwithstanding the provisions of paragraph 1 of this Article, an individual who is a resident of India shall be exempt from tax in Malaysia on remuneration in respect of an employment exercised in any basis year for a year of assessment in Malaysia, if---- a.     he is present in Malaysia for a period or periods not exceeding in the aggregate 183 days during that basis year; and b.    any period for which he is present within Malaysia does not form part of a continuous period of more than 183 days throughout which he is present within Malaysia; and c.     the remuneration is paid by or on behalf of an employer who is not a resident of Malaysia; and d.    the amount of remuneration is not deductible in computing the income or profits of an enterprise chargeable to Malaysian tax. 4.     Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft engaged in international traffic and operated by an enterprise of one of the Contracting States may be taxed in that Contracting State. 5.     In relation to remuneration of a director of a company derived from the company, the provisions of this Article shall apply as if the remuneration were remuneration of an employee in respect of an employment. ARTICLE XV Directors Fees Notwithstanding the provisions of Article 14, directors' fees and similar payments derived by a resident of one of the Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State. ARTICLE XVI Artistes and Athletes 1.     Notwithstanding the provisions of Article 14, income derived by public entertainers (such as stage, motion picture, radio or television artistes and musicians) or athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised: Provided that such income shall not be taxed in the said Contracting State if the visit of the public entertainers or athletes to that State is directly or indirectly supported, wholly or substantially, from the public funds of the Government of the other Contracting State. 2.     For the purposes of this Article, the term "Government" includes a State Government, a political sub-division, or a local or statutory authority of either Contracting State. ARTICLE XVII Non-Government Pensions and Annuities Any pension (other than a pension of the kind referred to in Article 18) or any annuity in respect of past services derived by an individual who is a resident of one of the Contracting States from the other Contracting State shall be taxable only in the first-mentioned Contracting State. ARTICLE XVIII Government Remuneration and Pension 1.     Remuneration (not being a pension) paid by the Government of Malaysia to any individual who is a citizen of Malaysia in respect of services rendered in the discharge of governmental functions in India shall be exempt from Indian tax. 2.     Remuneration (not being a pension) paid by the Government of India to any individual who is a citizen of India in respect of services rendered in the discharge of governmental functions in Malaysian shall be exempt from Malaysian tax. 3.     Any pension paid by the Government of one of the Contracting State to any individual may be taxed in that Contracting State. 4.     The provisions of paragraphs 1 and 2 of this Article shall not apply to payments in respect of services rendered in connection with any business carried on by the Government of either of the Contracting States for the purposes of profit. 5.     For the purposes of this Article, the term "Government" shall include any State Government or local or statutory authority of either Contracting State and in particular the Bank Negara Malaysia and the Reserve Bank of India. ARTICLE XIX Students and Apprentices 1.     An individual who is a resident of one of the Contracting States and who visits the other Contracting State solely as a student at a recognised university, college, school or other similar recognised education institution in that other Contracting State or as a business or technical apprentice therein, for a period not exceeding five years from the date of his first arrival in that other Contracting State in connection with that visit, shall be exempt from tax in that other Contracting State on---- a.     all remittances from abroad for the purposes of his maintenance, education or training; and b.    any remuneration (not exceeding 3,000 Malaysian dollars or 7,500 Indian Rupees during any basic year or previous year, as the case may be, for any year of assessment) for personal services rendered in that other Contracting State with a view to supplementing the resources available to him for such purposes. 2.     An individual who is a resident of one of the Contracting States and who visits the other Contracting State for the purposes of study, research or training solely as a recipient of a grant, allowance or award from the Government of either of the Contracting States or from a scientific, educational, religious or charitable organisation or under a technical assistance programme entered into by the Government of either of the Contracting States for a period not exceeding five years from the date of his first arrival in that other Contracting State in connection with that visit shall be exempt from tax in that other Contracting State on---- a.     the amount of such grant, allowance or award; b.    all remittances from abroad for the purposes of his maintenance, education or training; and c.     any remuneration (not exceeding 3,000 Malyasian Dollars or 7,500 Indian Rupees for any basic year or previous year, as the case may be, for any year of assessment) in respect of services in that other Contracting State if the services are performed in connection with his study, research, training or are incidental thereto. 3.     An individual who is a resident of one of the Contractng States and who visits the other Contracting State solely as an employee of or under contract with, the Government of an enterprise of the first-mentioned Contracting State solely for the purpose of acquiring technical, professional or business experience for a period not exceeding twelve months from the date of his first arrival in that other Contracting State in connection with that visit shall be exempt in that other Contracting State on:--- a.     all remittances from abroad for the purposes of maintenance, education or training; and b.    any remuneration, so far as it is not in excess of 5,000 Malaysian Dollars or 12,500 Indian Rupees, as the case may be, for personal services rendered in that other Contracting State, provided such services are in connection with his studies or training or are incidental thereto. 4.     For the purposes of this Article and Article 20:----                       i.        the term "Government" shall have the same meaning as in paragraph 5 of Article 18;                      ii.        an individual shall be deemed to be a resident of a Contracting State if he is resident in that Contracting State in the basic year or the previous year, as the case may be, in which he visits the other Contracting State or in the immediately preceding basic year or the previous year. ARTICLE XX Professors, Teachers and Researchers 1.     An individual who is a resident of one of the Contracting States and who, at the invitation of the Government of the other Contracting State or of a university or other recognised educational institution situated in that other Contracting State, visits that other Contracting State for the primary purpose of teaching or engaging in research or both, at a university or other recognised educational institution shall be exempt from tax in that other Contracting State on his income from personal services for teaching or research or both at the university or the recognised educational institution, for a period not exceeding two years from the date of his arrival in that other Contracting State. 2.     This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. ARTICLE XXI Income of Government Institutions 1.     The Government of one of the Contracting States shall be exempt from tax in the other Contracting State in respect of any income derived by such Government from that other Contracting State. 2.     For the purpose of paragraph 1 of this Article, the term "Government":---- a.     in the case of Malaysia means the Government of Malaysia and shall include:----                       i.        the Governments of the States;                      ii.        the Bank of Negara Malaysia;                     iii.        any such institution or body as may be agreed from time to time between the two Contracting States; b.    in the case of India means the Government of India and shall include:----                       i.        the Government of the States and the Union territories of India;                      ii.        the Reserve Bank of India;                     iii.        any such institution or body as may be agreed from time to time between the two Contracting States. CHAPTER IV ELIMINATION OF DOUBLE TAXATION ARTICLE XXII 1.     The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Agreement. 2.       a.     The amount of Malaysian tax payable, under the laws of Malaysia, and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of India, in respect of income from sources within Malaysia which has been subjected to tax both in India and Malaysia, shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax. b.    For the purposes of the credit referred to in sub-paragraph (a) above, there shall be deemed to have been paid by the resident of India:----                       i.        the amount of tax which would have been paid in respect of royalties but for the exemption provided in paragraph 2 of Article 13; and (ii) the amount of tax which would have been paid if the Malaysian tax had not been reduced or relieved in accordance with the special incentive measures designed to promote economic development in Malaysia---- aa.  which are set forth in section 21, 22 and, 26 of the Investment Incentives Act, 1968 of Malaysia; or bb.  which may be introduced in future in Income-Tax Act 1967, Supplementary Income-Tax Act, 1967, Petroleum (Income-Tax) Act, 1967 or Investment Incentives Act, 1968 in modification of or in addition to the existing measures; Provided an agreement is made between the two Contracting States in respect of the scope of the benefit accorded by the said measures. 3.     a.     The amount of Indian tax payable, under the laws of India and in accordance with the provisions of this Aareement, whether directly or by deduction, by a resident of Malaysia, in respect of income from sources within India which has been subjected to tax both in India and Malaysia, shall be allowed as a credit against Malaysian tax payable in respect of such income, but in an amount not exceeding that proportion of Malaysian tax which such income bears to the entire income chargeable to Malaysian tax. b.    For the purposes of the credit referred to in sub-paragraph (a) above, there shall be deemed to have been paid by the resident of Malaysia the amount which would have been paid if the Indian tax had not been reduced or relieved in accordance with the special incentive measures designed to promote economic development in India----                       i.        in relation to royalties, as set forth in the relevant annual Finance Act of India; and                      ii.        in relation to other income as set forth in the following sections of the Income-tax Act, 1961 of India or which may be introduced in future in the Indian tax laws in modification of or in addition to the existing measures, provided that an agreement is made between the two Government in respect of the scope of the benefit accorded by the said measures:--- ae.  (aa) Section 10 (15) (iv) (b) and (c)----relating to exemption from tax of (a) an approved foreign financial institution in respect of interest on moneys lent by it to an industrial undertaking in India under a loan agreement; and (b) a non-resident in respect of interest on moneys lent or credit facilities allowed by him to an industrial undertaking in India for the purchase outside India of raw materials or capital plant and machinery; bb.  Section 33---relating to development rebate in respect of ships, machinery or plant; ce.  Section 80J---relating to deduction in respect of profits and gains from eligible industrial undertaking or ships or hotels; dd.  Section 80K----relating to deduction in respect of dividends attributable to profits and gains from eligible industrial undertakings or ships or hotels; and ee.  Section 80M---relating to deduction in respect of certain dividends received by a company from a domestic company. This Sub-clause shall apply in relation to a company which is a resident of Malaysia only if such company beneficially holds shares (either singly or together with any company controlling it or any company controlled by it) carrying not less than ten per cent of the voting power in the domestic company and the domestic company is an industrial company,                 iii.        any other incentive measure as may be agreed from time to time between the two Contracting States. CHAPTER V SPECIAL PROVISIONS ARTICLE XXIII Non-Discrimination 1.     Citizens or nationals of one of the Contracting States shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which citizens or nationals of that other Contracting State in the same circumstances and under the same conditions are or may be subjected. This provision shall not be construed as obliging one of the Contracting States to grant to citizens of the other Contracting State not resident in the first-mentioned Contracting State those personal allowances, relief and reductions for tax purposes which are by law available only to citizens of that first-mentioned Contracting State and to such other persons as may be specified in such law who are not resident in that first-mentioned Contracting State. 2.     The taxation on a permanent establishment which an enterprise of one of the Contracting States has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities in the same circumstances and under the same conditions. 3.     Enterprises of one of the Contracting States, the capital of which is wholly or partly owned or controlled, directly or indirectly by one or more residents of the other Contracting State, shall not be subjected in the first mentioned Contracting State to any taxation or any requirement connected therewith which in other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned Contracting State are or may be subjected in the same circumstances and under the same conditions. 4.     In this Article, the term "citizens or nationals" in relation to a Contracting State means:--- a.     all individuals possessing the citizenship or nationality of that Contracting State; b.    all legal persons, partnerships, associations and other entities deriving their status as such from the law in force in that Contracting State. ARTICLE XXIV Mutual Agreement Procedure 1.     Where a resident of one of the Contracting States, considers that the actions of one or both of the Contracting States result, or will result in taxation not in accordance with this Agreement, he may notwithstanding the remedies provided by the taxation laws in force in the Contracting States present his case to the competent authority of the Contracting State of which he is a resident. 2.     The competent authority of the first-mentioned Contracting State shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve that case by the mutual agreement with the competent authority of the other Contracting State with a view to the avoidance of taxation which is not in accordance with this Agreement. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purposes of giving effect to the provisions of this Agreement. ARTICLE XXV Exchange of Information 1.     The competent authorities of the Contracting States shall exchange such information or document as is necessary for carrying out the provisions of this Agreement or for the prevention or detection of evasion or avoidance of the taxes which are the subject of this Agreement. Any information or document so exchanged shall be treated as secret but may be disclosed to persons (including a court or administrative body) concerned with the assessment collection, enforcement, or prosecution in respect of taxes which are the subject matter of this Agreement or to persons with respect to whom the information or document relates. 2.     The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases. The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis. 3.     In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: a.     to carry out administrative measures at variance with the laws of administrative practice of that or of the other Contracting State; b.    to supply information or documents which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c.     to supply information or documents which would disclose any trade, business, industrial, commercial or professional secret or trade process or information the disclosure of which would be contrary to public policy. ARTICLE XXVI Diplomatic and Consumer Officials Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements. CHAPTER VI FINAL PROVISIONS ARTICLE XXVII Entry into Force 1.     This Agreement shall come into force on the date when the last of all such things shall have been done in Malaysia and India as are necessary to give the Agreement the force of law in Malaysia and India respectively. 2.     The Contracting States shall notify each other of the completion of the requirements mentioned in paragraph 1 of this Article. The exchange of diplomatic notes certifying that this requirement has been completed shall take place at Kuala Lumpur. 3.     Upon the exchange of such diplomatic notes this Agreement shall have effect. a.     in Malaysia---- as respect Malaysian tax for the year of assessment beginning on 1st January, 1973, and subsequent years of assessment; b.    in India,----- as respects Indian tax for the assessment year commencing on the 1st day of April, 1973, and subsequent years of assessment. ARTICLE XXVIII Termination 1.     This Agreement shall continue in effect indefinitely, but either of the Contracting States may, on or before 30th June in any calendar year after the year 1975 give to the other Contracting State written notice of termination and in such event this Agreement shall cease to be effective---- a.     in India---- as respects Indian tax for the year of assessment commencing on the 1st day of April of the calendar year next following the calendar year in which such notice is given and subsequent years of assessment; b.    in Malaysia----- as respects Malaysia tax for the year of assessment next following the calendar year in which such notice is given and subsequent years of assessment. IN WITNESS whereof the undersigned, duly authorised thereto, have signed this Agreement. Done in duplicate at New Delhi, this twenty-fifth day of October one thousand nine hundred and seventy-six in the Hindi, Malay and English languages, all the texts being equally authentic, except that in the case of divergence of interpretation the English text shall prevail. (Sd/-) PRANAB KUMAR MUKHERJEE. For the Government of the Republic of India (Sd/-) TAN SRI HAJI ABDUL KHALID BIN AWANG OSMAN. For the Government of Malaysia. PROTOCOL At the time of signing the Agreement between the Government of India and the Government of Malaysia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the undersigned have agreed that as regards income derived from a Contracting State by a resident of the other Contracting State from the operation of ships in international traffic the competent authority of the first-mentioned Contracting State shall accept a certificate issued by the competent authority of the other Contracting State for the purpose of Article 8 of the Agreement. 2.     The certificate shall show the following:---- a.     the gross income from wherever derived; b.    income or loss in respect of shipping operations computed for the purpose of taxation in the other Contracting State; and c.     the total depreciation allowances (excluding any allowance brought forward from a previous period) given by the competent authority of that other Contracting State. 3.     Further, it is also agreed that this Protocol shall constitute an integral part of the Agreement. IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Protocol. DONE in duplicate at New Delhi on the 25th day of October, 1976 in the Hindi, Malay and English languages, all the texts being equally authentic, except that in the case of divergence of interpretation the English text shall prevail. (Sd/-) PRANAB KUMAR MUKHERJEE, For the Govt. of India. Sd/-) TAN SRI HAJI ABDUL KHALID BIN AWANG OSMAN, For the Govt. of Malaysia

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(Rs.85/-) Tanzania Double Taxation Avoidance Agreement AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA FOR THE AVOIDANCE DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME Notification No. G.S.R. 559(E) dtd. 16-10-1981 Whereas the annexed Agreement between the Government of the Republic of India and the Government of the United Republic of Tanzania for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has been ratified and the instruments of ratification exchanged, as required by Article 30 of the said Agreement: Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profit) Surtax Act, 1964 (7 of 1964) the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE UNITED REPUBLIC OF TANZANIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the United Republic of Tanzania. Desiring to conclude in Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows: CHAPTER I SCOPE OF THE AGREEMENT Article 1 Personal Scope This Agreement shall apply to persons who are residents of one or both the Contracting States. Article 2 Taxes Covered 1.     The taxes to which this Agreement shall apply are: a.       In the case of India: 1.     the income-tax including any surcharge thereon imposed under the Income-Tax Act, 1961 (43 of 1961); 2.     the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964); (herein after referred to as " Indian Tax "). b.      In the case of Tanzania; The income-tax and any other tax deemed to be an income-tax under the Income-Tax Act, 1973 (hereinafter referred to as " Tanzanian Tax "). 2.     The Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to or in place of, the taxes referred to in paragraph 1 of this Article. 3.     At the end of each year, the competent authorities of the Contracting States shall notify to each other any significant changes which have been made in their respective taxation laws which are the subject of this Agreement and furnish copies of relevant enactments and regulations. CHAPTER II DEFINITIONS Article 3 General Definitions 1.     In this Agreement, unless the context otherwise requires: a.     The term 'India' means the territory of India and includes the territorial sea and airspace above it as well as any other maritime zone referred to in the Territorial Waters, Continental Shelf Exclusive Economic Zone and other Maritime Zones Act, 1976 (Act No. 80 of 1976), in which India has certain rights and to the extent these rights can be exercised therein as if such maritime zone is a part of the territory of India; b.    The term " Tanzania " means the United Republic of Tanzania, including any area outside the territorial waters of Tanzania which, in accordance with international law, has been or may be designated, under the laws of Tanzania concerning the Continental Shelf, as an area over which Tanzania may exercise sovereign rights with respect to the exploration for and exploitation of natural resources; c.     the terms " a Contracting State " and " the other Contracting State " mean India or Tanzania, as the context requires; d.    the terms " tax " means Indian tax or Tanzanian tax, as the context requires but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or which represents a penalty imposed relating to those taxes; e.     the term " person " includes individual companies and all other entitles which are treated as taxable units under the taxation laws in force in the respective Contracting States; f.     the term " company " means any body corporate or any entity which is treated as a company under the taxation laws in force in the respective Contracting States; g.    the terms " enterprise of a Contracting State " and " enterprise of the other Contracting State " mean respectively, an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; h.     the term " competent authority " means in the case of India, the Central Government in the Ministry of Finance (Department of Revenue); and in the case of Tanzania, the Minister responsible for Finance or his authorised representative; i.      the term " nationals " means: 1.     all individuals possessing the nationality of a Contracting State; 2.     all legal persons, partnerships and associations deriving their status as such from the law in force in a Contracting State. 2.     In the application of the provisions of this Agreement by one of the Contracting States, any term not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State relating to the taxes which are the subject of this Agreement. Article 4 Fiscal Domicile 1.     For the purpose of this Agreement, the term " resident of a Contracting State " means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of similar nature. 2.     Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his residential status for the purpose of this Agreement shall be determined in accordance with the followings rules: a.     He shall be deemed to be resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (hereinafter referred to as his " centre of vital interests "); b.    If the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c.     If he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; d.    If he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both the Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. Article 5 Permanent Establishment 1.     For the purpose of this Agreement, the term " permanent establishment " means a fixed place of business in which the business of the enterprise is wholly or partly carried on. 2.     The term " permanent establishment " shall include: a.     a place of management; b.    a branch; c.     in office; d.    a factory; e.     a workshop; f.     a mine, a quarry, an oil field or other place of extraction of natural resources; g.    a farm, plantation or other place where agricultural forestry, plantation, or related activities are carried on; h.     a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or supervisory activity continue for a period of more than six months. 3.     The term " permanent establishment " shall not be deemed to include: a.     the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; c.     the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or for collecting information, for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information or for scientific research being activities solely of a prepartory or auxiliary character in the trade or business of the enterprise. 4.     A person acting in a Contracting State for or on behalf of an enterprise of the other Contracting State-other than an agent of an independent status to whom the provisions of paragraph 5 apply-shall be deemed to be a permanent establishment of that enterprise in the first-mentioned State if:               i.        He has and habitually exercises in that State, an authority to conclude contracts for or on behalf of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise; or              ii.        he habitually maintains in the first-mentioned Contracting State a stock of goods or merchandise belonging to that enterprise from which he regularly fulfills orders on behalf of the enterprise. 5.     An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he would not be considered an agent of an independent status within the meaning of this paragraph. 6.     The fact that a company, which is a resident of a Contracting State controls or is controlled by a Company which is a resident of the other Contracting State, or which carries on business in that other Contracting State (whether through a permanent establishment or otherwise), shall not, of itself, constitute for either company a permanent establishment of the other. 7.     An enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if, it carries on a business which consists of providing the services of public entertainers (such as theatre, motion picture, radio or television artists and musicians) or atheletes in that other Contracting State unless the enterprise is directly or indirectly supported, wholly or substantially, from the public funds of the Government of the first-mentioned Contracting State in connection with the provision of such services. CHAPTER III TAXATION OF INCOME Article 6 Income from Immovable Property 1.     Income from immovable property may be taxed in the Contracting State in which such property is situated. 2.     The term " immovable property " shall be defined in accordance with the law and usage of the Contracting State in which the property is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, to which the provisions of general law respecting landed property apply, usufruct, of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, oilwells, quarries and other places of extraction of natural resources. Ships and aircraft shall not be regarded as immovable property. 3.     The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services. Article 7 Business Profits 1.     The profits of an enterprise of a Contracting State shall be taxable only in that Contracting State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other Contracting State but only so much of them as is attributable to that permanent establishment. 2.     If an enterprise of a Contracting State, which has a permanent establishment in the other Contracting State, sells goods or merchandise of the same or similar kind as those sold by the permanent establishment or renders services of the same or similar kind as those rendered by the permanent establishment, the profits of such activities may be attributed to the permanent establishment unless the enterprise proves that such sales or services are not attributable to the activity of the permanent establishment. 3.     Where an enterprise, of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. In any case, where the correct amount of profits attributable to a permanent establishment is incapable of determination or the ascertainment thereof persents exceptional difficulties, the profits attributable to the permanent establishment may be estimated on a reasonable basis. 4.     In so far is it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 3 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of appointment adopted shall, however, be such that the result shall be accordance with the principles laid down in this Article. 5.     In the determination of the profits of a permanent establishment there shall be allowed as deductions expenses which are incurred for the purposes of the business of the permanent establishment including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, but this does not include any expenses, which, under the law of that State would not be allowed to be deducted by an enterprise of that State. 6.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 7.     For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 8.     The term 'business profits' means income derived by an enterprise from the carrying on of business; but does not include income in the form of rents, royalties (including rents or royalties in respect of cinematographic films or video tapes for television) fees for technical services, management charges, or remuneration or fees for providing services of technical or other personnel, interest, dividends, capital gains, remuneration for labour or personal (including professional) services or income from the operation of ships or aircraft. Article 8 Air Transport 1.     Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 2.     The provisions of paragraph 1 of this Article shall also apply to a share of profits from the operation of aircraft in international traffic derived by an enterprise of a Contracting State through participation in a pooled service, in a joint air transport operation or in an international operating agency. 3.     For the purposes of paragraph 1, interests on funds directly connected with the operation of aircraft in international traffic shall be regarded as income from the operation of such aircraft, and the provisions of Article 12 shall not apply in relation to such interest. Article 9 Shipping 1.     Income of an enterprise of one of the Contracting States derived from the other Contracting State from the operation of ships in international traffic may be taxed in that other, Contracting State, but the tax chargeable in that other Contracting State on such income shall be reduced by an amount equal to 50 per cent of such tax. 2.     For the purposes of paragraph 1 of this Article, income derived from the other Contracting State from the operation of ships shall mean income from the carriage of passengers, mail, livestock, or goods shipped in that other Contracting State. 3.     Paragraph 1 shall not apply to profits arising as a result of coastal traffic. Article 10 Associated Enterprises Where a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Article 11 Dividends 1.     Dividends paid by a company which is resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the law of that State, but the tax so charged shall not exceed: a.     10 per cent of the gross amount of the dividends if the recipient is a company which owns at least 10 per cent of the shares of the company paying the dividends during the period of six months immediately preceding the date of payment of the dividends; b.    15 per cent of the gross amount of the dividends in all other cases. 3.     The term " dividends " as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares or any other item which is deemed to be a dividend or distribution of a company by the taxation law of the Contracting State of which the company making the distribution is a resident. 4.     The provisions of paragraphs 1 and 2 shall not apply if the recipient of the dividends being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State professional services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment of fixed base. In such a case the provisions of Article 7 or Article 16, as the case may be, shall apply. 5.     Where a company which is a resident of a Contracting State, derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the Company to persons who are not resident of that other State, or subject the company's undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consists wholly or partly of profits or income arising in that other State. Article 12 Interest 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such interest may also be taxed in the Contracting State in which it arises, and according to the law of that State, but the tax so charged shall not exceed 12 1/2 per cent of the gross amount of the interest. 3.     Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to the Government of the other Contracting State Bank or local authority thereof, the Central Bank of that other Contracting State, or any agency wholly owned by that Government or local authority shall be exempt from tax of the first-mentioned Contracting State. The competent authorities of the Contracting States may determine by mutual agreement any other government institution to which this paragraph shall apply. 4.     The term " interest " as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and other debt-claims of every kind as well as all other income assimilated to income from money lent by the taxation law of the Contracting State in which the income arises. 5.     The provisions of paragraphs 1 and 2 shall not apply if the recipient of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 or Article 16, as the case may be, shall apply. 6.     Interest shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by that permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 7.     7.Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Agreement. Article 13 Royalties 1.     Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties may also be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 20 per cent of the gross amount of the royalties. 3.     The term " royalties " as used in this Article means payments of any kind received as a consideration for the use of or the right to use, any copyright of literary, aristic or scientific work (including cinematograph films, and films or tapes for radio or television broadcasting), any patent, trade mark design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4.     The provisions of paragraphs 1 and 2 shall not apply if the recipient of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalities arise through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 16, as the case may be, shall apply. 5.     Royalties shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 6.     Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provision of this Agreement. Article 14 Capital Gains 1.     Gains from the alienation of immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such property is situated. 2.     Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing professional services, including such gains from the alienation of such permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in that other State. 3.     Notwithstanding the provisions of paragraph 2, gains by an enterprise of a Contracting State from the alienation of ships and aircraft which it operates in international traffic and movable property pertaining to the operation of such ships and aircraft shall be taxable only in that State. 4.     Gains derived by a resident of a Contracting State from the alienation of any property other than those mentioned in paragraphs 1, 2 and 3 shall be taxable only in that State. 5.     The term " alienation " means the sale, exchange, transfer or relinquishment of the property or the extinguishment of any rights therein or the compulsory acquisition thereof under any law in force in the respective Contracting States. Article 15 Management Fees 1.     Management or professional fees arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such management or professional fees may be taxed in the Contracting State in which they arise, and according to the law of that State, but the tax so charged shall not exceed twenty per cent of the gross amount of the management or professional fees. 3.     The term " management or professional fees " as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a managerial, technical or consultancy nature. 4.     The provisions of paragraphs 1 and 2 shall not apply if the recipient of the management or professional fees, being a resident of a Contracting State, carries on business in the other Contracting State in which the management or professional fees arise, through a permanent establishment situated therein, or performs in that other State professional services from a fixed base situated therein, and the right of property in respect of which the management or professional fees are paid, is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of article 7 or article 16, as the case may be, shall apply. 5.     Management or professional fees shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the management or professional fees, whether he is a resident of that State or not, has in a Contracting State a permanent establishment in connection with which the liability to pay the management, or professional fees was incurred and such management or professional fees are borne by such permanent establishment, then such management or professional fees shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 6.     Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the management or professional fees paid having regard to the services for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Agreement. Article 16 Independent Personal Services 1.     Subject to the provisions of Article 15, income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless: - a.     he has a fixed base regularly available to him in the other Contracting States for the purpose of performing his activities, in which case so much of the income may be taxed in that other State as is attributable to that fixed base; or b.    he is present in the other Contracting State for the purpose of performing his activities for a period or periods exceeding in the aggregate 183 days in the relevant year of income and in which case so much of the income may be taxed in that other State as is attributable to the activities performed in that other State. 2.     The term " professional services " includes independent scientific, literary, artistic, educational or teaching activities, as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants. Article 17 Dependent personal services 1.     Subject to the provisions of Articles 18, 19, 20, 21, 22 and 23, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised such remuneration as is derived there from may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first mentioned State if: a.     the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the relevant year of income, and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and c.     the remuneration is not borne by a permanent establishment or fixed base which the employer has in the other State. 3.     Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic, may be taxed in the Contracting State in which the place of effective management of the enterprise is situated. Article 18 Directors' Fees Directors' fees and similar payments derived by a resident of a Contracting State in his capacity as a member of the Board of Directors of a company which is a resident of the other Contracting State may be taxed in that other Contracting State. Article 19 Artists and Athletes 1.     Notwithstanding the provisions of Articles 16 and 17, income derived by public entertainers (such as theatre, motion picture, radio or television artistes and musicians) or athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised: Provided that such income shall not be taxed in the said Contracting State if the visit of the public entertainers or athletes to that State is directly or indirectly supported, wholly or substantially, from the public funds of the Government of the other Contracting State. 2.     For the purposes of this Article, the term 'Government' includes a State Government, a political sub-division, or a local or statutory authority of either Contracting State. Article 20 Government Functions 1.     Remuneration (not being a pension) paid by the Government of a Contracting State to any individual who is a citizen of that State in respect of services rendered in the discharge of governmental functions in the other Contracting State shall be taxable only in the first-mentioned Contracting State. 2.     Any pension paid by the Government of one of the Contracting States to any individual may be taxed in that Contracting State. 3.     The provisions of paragraphs 1 and 2 shall not apply to remuneration and pensions in respect of services rendered in connection with any business carried on by the Government of either of the Contracting States for the purposes of profit. 4.     For the purposes of this Article, the term " Government " shall include any State Government or local or statutory authority of either Contracting State and in particular the Reserve Bank of India and the Bank of Tanzania. Article 21 Non-Government Pensions and Annuities 1.     Any pension (other than a pension referred to in Article 20) or annuity derived by a resident of a Contracting State from sources within the other Contracting State may be taxed only in the first-mentioned Contracting State. 2.     The term " pension " means a periodic payment made in consideration of services rendered in the past or by way of compensation for injuries received in the course of performance of services. 3.     The term " annuity " means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth. Article 22 Students and Apprentices 1.     A student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned Contracting State solely for the purpose of his education or training, shall be exempt from tax in the first-mentioned Contracting State on: a.     payments made to him by persons residing outside that first-mentioned Contracting State for the purpose of his maintenance, education or training; and b.    remuneration from employment in that first-mentioned Contracting State, in an amount not in excess of Rs. 10,000 of its equivalent in Tanzania currency during any " previous year " or the " year of income ", as the case may be, provided that such employment is directly related to his studies or is undertaken for the purpose of his maintenance. 2.     The benefits of this Article shall extend only for such period of time as may be reasonably or customarily required to complete the education or training undertaken, but in no event shall any individual have the benefits of this Article for more than three consecutive years from the date of his first arrival in the first-mentioned Contracting State. Article 23 Professors and Teachers 1.     A professor or teacher who visits a Contracting State for the purpose of teaching or engaging in research, or both, at a university, or other approved educational institution in that Contracting State and who is, or was immediately before such visits, a resident of the other Contracting State, shall be exempt from tax in the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding 24 months from the date of his arrival in that Contracting State. 2.     This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. 3.     For the purposes of this Article and Article 22, an individual shall be deemed to be a resident of a Contracting State if he is resident:               i.        in the case of India, in the " previous years ", and              ii.        in the case of Tanzania, in the " year of income " in which he visits the other Contracting State or in the immediately preceding " previous year " or " year of income ", as the case may be. 4.     For the purposes of paragraph 1, " approved educational institution " means an institution which has been approved in this regard by the competent authority of the concerned Contracting State. Article 24 Income not Expressly Mentioned Items of income of a resident of a Contracting State are not expressly mentioned in the foregoing Articles of this Agreement in respect of which he is subject to tax in that State shall be taxable only in that State. CHAPTER IV METHOD FOR ELIMINATION OF DOUBLE TAXATION Article 25 Avoidance for double Taxation 1.     The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisons to the contrary are made in this Agreement. 2.       a.     The amount of Tanzanian tax payable, under the laws of Tanzania and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of India, in respect of income from sources within Tanzania which has been subjected to tax both in India and Tanzania, shall be allowed as a credit against the Indian tax payable in respect of such income provided that such credit shall not exceed Indian tax (as Computed before allowing any such credit), which is appropriate to the income derived from sources within Tanzania; so, however, that where such resident is a company by which Surtax is payable in India, the credit aforesaid shall be allowed in the first instance against income-tax payable by the Company in India and as to the balance, if any, against surtax payable by it in India; b.    For the purposes of the credit referred to in sub-paragraph (a) above, the term " Tanzania tax payable " shall be deemed to include any amount which would have been payable as Tanzania tax for any year but for-                       i.        any exemption from tax on interest granted under paragraph 1 of the First Schedule, Part II of the Income-Tax Act, 1973; or                      ii.        any investment deduction granted under paragraphs 24, 25 and 26 of the Second Schedule to the Income-Tax Act, 1973; or                     iii.        the lower corporation rate of income-tax provided by paragraph 4(b) of the Third Schedule to the Income-Tax Act, 1973; or                     iv.        any other provisions which may subsequently be enacted granting an exemption or reduction of tax which the competent authorities of the Contracting States agree to be for the purpose of economic development. 3.     a.     The amount of Indian tax payable, under the laws of India and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of Tanzania in respect of income from sources within India which has been subjected to tax both in India and Tanzania shall be allowed as a credit against Tanzania tax payable in respect of such income provided that such credit shall not exceed the Tanzanian tax (as compared before allowing any such credit), which is appropriate to the income derived from sources within India; b.    For the purposes of the credit referred to in sub-paragraph (a) above, the term " Indian tax payable " shall be deemed to include any amount by which Indian tax has been reduced by the special incentive measures set forth in the following sections of the Income-tax Act, 1961:                               i.        Section 10(4)-relating to exemption from tax on interest payable to a non-resident on any security notified by the Government of India;                              ii.        (ii)Section 10(4A)-relating to exemption from tax on interest payable to a non-resident on moneys in a Non-resident (External) Account;                             iii.        Section 10(15)(iv)-relating to exemption from tax of (a) non-resident in respect of moneys lent by him to the Government or local authority in India; (b) an approved foreign financial institution in respect of interest on moneys lent by it to an industrial undertaking in India under a loan agreement; and (c) a non-resident in respect of interest on moneys lent or credit facilities allowed by him to an industrial undertaking in India for the purchase outside India of raw materials or capital plant and machinery or for industrial development in India;                             iv.        Section 32A-relating to investment allowance in respect of ships, aircrafts, machinery or plant;                              v.        Section 33A-relating to development allowance for planting or replanting of tea bushes;                             vi.        Section 35CC-relating to the rural development allowance;                            vii.        Section 54E-relating to capital gains;                           viii.        Section 80HH-relating to deduction in respect of profits and gains from newly established industrial undertakings or hotel business in backward areas;                             ix.        Section 80HHA-relating to deduction in respect of profits and gains from newly established small scale industrial undertakings in certain areas;                              x.        Section 80J-relating to deduction in respect of profits and gains from eligible industrial undertakings or ships or hotels;                             xi.        Section 80K-relating to deduction in respect of dividends attributable to profits and gains from eligible industrial undertakings or ships or hotels;                            xii.        Section 80L-relating to deduction in respect of interest on certain securities, dividends, etc; and                           xiii.        Any other provisions which may subsequently be enacted granting an exemption or reduction of tax which the competent authorities of the Contracting States agree to be for the purposes of economic development. 4.     Income which, in accordance with the provisions of this Agreement, is not to be subjected to tax in a Contracting State, may be taken into account for calculating the rate of tax to be imposed in that Contracting State. CHAPTER V SPECIAL PROVISIONS Article 26 Non-Discrimination 1.     The national of a contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. 2.     The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances. 3.     Nothing contained in this Article shall be construed as obliging a Contracting State to grant to persons not resident in that State any personal allowances, reliefs and reductions for taxation purposes which are by law available only to persons who are resident. 4.     Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more resident of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances. 5.     In this Article the term " taxation " means taxes which are the subject of this Agreement. Article 27 Mutual Agreement Procedure 1.     Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Agreement, he may notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the Agreement. 2.     The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the national laws of the Contracting States. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to each agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. Article 28 Exchange of Information 1.     The competent authorities of the Contracting States shall exchange such information of document as is necessary for carrying out the provisions of this Agreement or for the prevention of evasion of taxes which are the subject of this Agreement. Any information or document so exchanged shall be treated as secret but may be disclosed to persons (including a court or other authorities) concerned with the assessment, collection, enforcement, investigation or prosecution in respect of the taxes which are the subject of this Agreement, or to persons with respect to whom the information or document relates. 2.     The exchange of information or documents shall be either on a routine basis or on request with reference to particular case or both. The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis. 3.     In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: - a.     to carry out administrative measures at variance with the laws or administrative practice of that or of the other Contracting State; b.    to supply information or documents which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c.     (c)to supply information or documents which would disclose any trade, business, industrial, commercial or professional secret or trade process or information the disclosure of which would be contrary to public policy. Article 29 Diplomatic and Consular Activities Nothing in this Agreement shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements. CHAPTER VI FINAL PROVISIONS Article 30 Entry into Force 1.     The present Agreement shall be ratified by the Contracting States according to their own internal legislation. 2.     The instruments of ratification shall be exchanged at Dar-es-Salam as soon as possible. 3.     Upon exchange of the instruments of ratification, the present Agreement shall have effect: - a.     in India, in respect of income arising in any year of account commencing on or after the 1st day of January following the calendar year in which the instruments are exchanged; b.    in Tanzania, in respect of income arising for any year of income commencing on or after the 1st day of January following the calendar year in which the instruments of ratification are exchanged; Article 31 Termination This Agreement shall continue in effect indefinitely but either of the Contracting States may on or before the 30th of June in the sixth or any subsequent calendar year following the calendar year in which the exchange of instruments of ratification takes place, give to the other Contracting State notice of termination and in such event this Agreement shall cease to have effect: a.     in India, in respect of income assessable for any year of assessment commencing on or after the first day of April in the second calendar year next following the calendar year in which the notice of termination is given; b.    in Tanzania, in respect of income arising for any year of income commencing on or after the first day of January in the calendar year next following the calendar year in which the notice of termination is given. IN WITNESS WHEREOF  the undersigned, being duly authorised thereto, have signed the present Agreement. DONE  in duplicate at Dar-es-Salam this Fifth day of September one thousand nine hundred and seventy nine in English language. (A. S. Gonsalves) (Ndugu E.I.M. Mtai) For the Government of India For the Government of Tanzania. (Agreement signed on 5-9-1979 as amended by Government of India's letter No. DAR/COM/204/3/69 dated 15-2-1980 and the Government of Tanzania's letter No. TYC/40/19/56 dated 3-7-1980) [F. No. 501/18/73-FTD]

Download Word Document In English. (Rs.85/-) Malta SECTION 90 OF THE INCOME-TAX ACT, 1961 --- DOUBLE TAXATION AGREEMENT AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH FOREIGN COUNTRIES --- WITH MALTA Notification No. 9908 [F. NO. 503/1/89/FTD], dated 22-11-1995 Whereas the annexed Agreement between the Government of the Republic of India and the Republic of Malta for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has entered into force on 8th February, 1995, after the notification by both the Contracting States to each other of the completion of the procedures required under their laws for bringing into force of the said Agreement in accordance with paragraph 1 of Article 29 of the said Agreement; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Agreement shall be given effect to in the Union of India. AGREEMENT BETWEEN THE REPUBLIC OF INDIA AND MALTA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF MALTA Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows: CHAPTER I SCOPE OF THE AGREEMENT Article 1 PERSONAL SCOPE: This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED: 1.     The existing taxes to which this Agreement shall apply are: a.     in India: the income-tax including any surcharge thereon; (hereinafter referred to as " Indian tax "); b.    in Malta: the income-tax; (hereinafter referred to as " Malta tax "). 2.     This Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph (1). The competent authorities of the Contracting States shall notify each other of any significant changes which are made in their respective taxation laws. 3.     Notwithstanding the other provisions of this Article, this Agreement shall not apply to tax paid or payable in Malta in accordance with the provisions of sub-section (11) of section 31. of the Income-tax Act (Cap. 123), concerning the chargeable income of any person engaged in the production of petroleum produced in Malta, or any substantially similar provision which is imposed after the date of signature of this Agreement. CHAPTER II DEFINITIONS Article 3 GENERAL DEFINITIONS: 1.     For the purposes of this Agreement, unless the context otherwise requires: a.     the term " India " means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law/the U.N. Convention on the Law of the Sea; b.    the term " Malta " when used in a geographical sense, means the Island of Malta, the Island of Gozo and the other Islands of the Maltese archipelago including the territorial waters thereof, and any area outside the territorial sea of Malta which, in accordance with international law, has been or may hereafter be designated, under the law of Malta concerning the Continental Shelf, as an area within when the rights of Malta with respect to the seabed and sub-soil and their natural resources may be exercised; c.     the term " company " means any body corporate or any entity which is treated as a body corporate for tax purposes; d.    the term " competent authority " means in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative; and in the case of Malta, the Minister responsible for finance or his authorised representative; e.     the term " a Contracting State " and " the other Contracting State " mean India or Malta as the context requires; f.     the term " enterprise of a Contracting State " and " enterprise of the other Contracting State " mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; f.(g) the term " fiscal year " in relation to Indian tax means " previous year " as defined in the Income-tax Act, 1961 (43 of 1961) and in relation to Malta tax means the year immediately preceding the " year of assessment " as defined in the Income-tax Act (Cap. 123); g.    the term " international traffic " means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; h.     the term " national " means any individual possessing the nationality of a Contracting State and any legal person, partnership or association deriving its status from the laws in force in the Contracting State; i.      the term " person " includes an individual, a company, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States; j.      the term " tax " means Indian tax or Malta tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Agreement applies or which represents a penalty imposed relating to those taxes. 2.     As regards the application of the Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which this Agreement applies. Article 4 RESIDENT: 1.     For the purposes of this Agreement, the term " resident of a Contracting State " means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2.     Where by reason of the provisions of paragraph (1), an individual is a resident of both Contracting States, then his status shall be determined as follows: a.     he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests); b.    if the State in which he has his centre of vital interests cannot be determined, or if he has no permanent home available to him in either State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode; c.     if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national; d.    if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where by reason of the provisions of paragraph (1) of a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT: 1.     For the purposes of this Agreement, the term " Permanent establishment " means a fixed place of business through which the business of the enterprise is wholly or partly carried on. 2.     The term " permanent establishment " includes especially: a.     a place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop; f.     a mine, an oil or gas well, quarry or any other place of extraction of natural resources including an offshore drilling site; g.    a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or activities (together with other such sites, projects or activities, if any) continues for a period of more than six months. 3.     Notwithstanding the preceding provisions of this Article, the term " permanent establishment " shall be deemed not to include: a.     the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; c.     the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise, or for collecting information, for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise any other activity of a preparatory or auxiliary character. 4.     A person engaged in a Contracting State in exploration of the seabed and its sub-soil or in exploitation of natural resources situated there as well as in activities which are complementary or auxiliary to such activities, is deemed to exercise such activities through a permanent establishment in that State. 5.     An enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if: a.     substantial equipment is in that other State being used or installed by, for or under contract with the enterprise; b.    it carries on supervisory activities in that State in connection with the use of equipment referred to in sub-paragraph (a). 6.     Notwithstanding the provisions of paragraphs (1) and (2) where a person --- other than an agent of an independent status to whom paragraph (7) applies --- is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to the purchase of goods or merchandise for the enterprise. 7.     An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of the enterprise, he shall not be considered as agent of an independent status if the transactions between the agent and the enterprise were not made under arm's length conditions. 8.     The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. CHAPTER III TAXATION OF INCOME Article 6 INCOME FROM IMMOVABLE PROPERTY: 1.     Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2.     The term " immovable property " shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work or to explore for, mineral deposits, sources and other natural resources. Ships, boats and aircraft shall not be regarded as immovable property. 3.     The provisions of paragraph (1) shall also apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraphs (1) and (3) shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS: 1.     The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is directly or indirectly attributable to that permanent establishment. The words " directly or indirectly " mean, for the purposes of this Article, that where a permanent establishment takes an active part in negotiating, concluding or fulfilling contracts entered into by the enterprise, then, notwithstanding that other part of the enterprise have also participated in those transactions, there shall be attributed to the permanent establishment that proportion of profits of the enterprise arising out of those contracts as the contribution of the permanent establishment to those transactions bears to that of the enterprise as a whole. 2.     Subject to the provisions of paragraph (3), where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment or with other associated enterprises with which it deals. 3.     In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses of the enterprise, being expenses which are incurred for the purposes of the permanent establishment (including executive and general administrative expenses so incurred) and which would be deductible if the permanent establishment were an independent entity which paid those expenses, whether incurred in the Contracting State in which the permanent establishment is situated or elsewhere in accordance with the provisions of and subject to the limitation of the taxation laws of that State. 4.     Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of the tax liability of a person, including the determination of such liability by the exercise of discretion or the making of an estimate by the competent authority of that State in cases in which, from the information available to the competent authority of that State, it is not possible or not practicable to ascertain the profits to be attributed to a permanent establishment, provided that law shall be applied, so far as the information available to the competent authority permits, consistently with the principles of this Article. 5.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 6.     For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. (7) The provisions of this Article shall not affect the provisions of the law of a Contracting State regarding the taxation of profits from the business of insurance. 7.     Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 SHIPPING AND AIR TRANSPORT: 1.     Profits derived by an enterprise of a Contracting State from the operation by that enterprise of ships or aircraft in international traffic shall be taxable only in that State. 2.     For the purposes of this Article, profits from the operation of ships or aircraft in international traffic shall mean profits derived by an enterprise described in paragraph 1 from the transportation by sea or air respectively of passengers, mail, livestock or goods carried on by the owners or lessees or charterers of ships or aircraft including: a.     the sale of tickets for such transportation on behalf of other enterprises; b.    other activity directly connected with such transportation; and c.     the rental of ships or aircraft incidental to any activity directly connected with such transportation. 3.     Profits of an enterprise of a Contracting State described in paragraph (1) from the use, maintenance, or rental of containers (including trailers, barges and related equipment for the transport of containers) used in connection with the operation of ships or aircraft in international traffic shall be taxable only in that State. 4.     The provisions of paragraphs (1) and (3) shall also apply to profits from participation in a pool, a joint business, or an international operating agency. 5.     For the purposes of this Article, interest on funds connected with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of such ships or aircraft, and the provisions of Article 11 (Interest) shall not apply in relation to such interest. Article 9 ASSOCIATED ENTERPRISES: 1.     Where: a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 2.     Nothing in this Article shall affect the application of any law of a Contracting State relating to the determination of such liability by the exercise of a discretion or the making of an estimate by the competent authority of that State in cases which, from the information available to the competent authority of that State, it is not possible or not practicable to determine the income to be attributed to an enterprise, provided that law shall be applied, so far as the information available to the competent authority permits, consistently with the principles of this Article. 3.     Where a Contracting State includes in the profits of an enterprise of that State, and taxes accordingly, profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to that enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other. Article 10 DIVIDENDS: 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but: a.     where the dividends are paid by a company resident of India to a resident of Malta who is the beneficial owner thereof, the Indian tax so charged shall not exceed:                       i.        10 per cent of the gross amount of the dividends if the beneficial owner is a company which owns at least 25 per cent of the shares of the company paying the dividends; and                      ii.        15 per cent of the gross amount of the dividends in all other cases; b.    where the dividends are paid by a company which is a resident of Malta to a resident of India who is the beneficial owner thereof Malta tax on the gross amount of the dividends shall not exceed that chargeable on the profits out of which the dividends are paid. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3.     The term " dividends " as used in this Article means income from shares, " jouissance " shares or " jouissance " rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 4.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 or Article 15, as the case may be, shall apply. (5) Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly or profits or income arising in such other State. Article 11 INTEREST: 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such interest may be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. 3.     Notwithstanding the provisions of paragraph (2), interest arising in a Contracting State shall be exempt from tax in that State if it is derived by the Government of the other Contracting State or a local authority thereof or any agency or instrumentality wholly owned and controlled by that Government or local authority. 4.     The term " interest " as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from Government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. 5.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 6.     Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is resident of a Contracting State or not, has in a Contracting State a permanent establishment or fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest shall be deemed to arise in the State in which the permanent establishment of fixed base is situated. (7) Where, by reason of a special relationship between the payer and the beneficial owner or between both of them, and some other person, the amount of the interest having regard to the debt claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 12 ROYALTIES AND FEES FOR INCLUDED SERVICES: 1.     Royalties and fees for included services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties and fees for included services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for included services the tax so charged shall not exceed 15 per cent of the gross amount of the royalties or fees for included services. 3.     The term " royalties " in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for: a.     the use of, or the right to use any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right; b.    the use of, or the right to use, any industrial, commercial or scientific equipment; c.     the supply of scientific, technical, industrial or commercial knowledge or information; d.    the use of, or the right to use:                               i.        motion picture films;                              ii.        films or video tapes for use in connection with television; or                             iii.        tapes for use in connection with radio broadcasting; or e.     total or partial forbearance in respect of the use or supply of any property or right referred to in this paragraph. 4.     The term " fees for included services " in this Article means payments or credits, whether periodical or not, and however described or computed, to the extent to which they are made as consideration for: a.     the supply of any assistance that is ancillary and subsidiary to, and is furnished as a means of enabling the application or enjoyment of, any such property or right as is mentioned in sub-paragraph (a) of paragraph (3), or any such equipment as is mentioned in sub-paragraph (b) of paragraph (3), or any such knowledge or information as is mentioned in sub-paragraph (c) of paragraph (3); b.    rendering of any technical or consultancy services (including the provision of technical or other personnel) if such services make available technical knowledge, (experience, skill, know-how or process or consist of the development and transfer of a technical plan or technical design. 5.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the royalties or fees for included services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for included services arise, through a permanent establishment situated therein, or performs in that other State independent personal services from fixed base situated therein, and the right or property in respect of which the royalties or fees for included services are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 6.     Royalties and fees for included services shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties or fees for included services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or fixed base in connection with which the liability to pay the royalties or fees for included services was incurred, and such royalties or fees for included services are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise, in the State in which the permanent establishment or fixed base is situated. 7.     Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties or fees for included services having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 13 TECHNICAL FEES: 1.     Technical fees arising in a Contracting State which are derived by a resident of the other Contracting State may be taxed in that other State. 2.     However, such technical fees may also be taxed in the Contracting State in which they arise, and according to the laws of that State; but if the recipient is the beneficial owner of the technical fees, the tax so charged shall not exceed 10 per cent of the gross amount of the technical fees. 3.     The term "technical fees" as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a technical, managerial or consultancy nature. 4.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the technical fees, being a resident of a Contracting State, carries on business in the other Contracting State in which the technical fees arise through a permanent establishment situated therein, or performs in that other State independent personal services, and the technical fees are effectively connected with such permanent establishment or such services. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 5.     Technical fees shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a statutory body thereof, or a resident of that State. Where, however, the person paying the technical fees, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation to pay the technical fees was incurred, and such technical fees are borne by that permanent establishment, then such technical fees shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 6.     Where, by reason of a special relationship between the payer and the recipient or between both of them and some other person, the amount of the technical fees paid exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the law of each Contracting State due regard being had to the other provisions of this Agreement. Article 14 ALIENATION OF PROPERTY: 1.     Income from gains from the alienation of immovable property, as defined in paragraph (2) of Article 6, may be taxed in the Contracting State in which such property is situated. 2.     Income from gains from the alienation of shares or comparable interests in a company, the assets of which consist wholly or principally of immovable property, may be taxed in the Contracting State in which the assets or the principal assets of the company are situated. 3.     Income from gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such income or gains arising from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in the other State. 4.     Income from gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident. 4.(5) Income from gains from the alienation of shares other than those mentioned in paragraph (2) in a company which is a resident of a Contracting State may be taxed in that State. 5.     Income from gains from the alienation of any property other than that referred to in paragraphs (1), (2),(3),(4) and (5) shall be taxable only in the Contracting State of which the alienator is a resident. Article 15 INDEPENDENT PERSONAL SERVICES: 1.     Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State. However, such income may be taxed in the other Contracting State in the following circumstances: a.     if he has a fixed based regularly available to him in the other Contracting State for the purpose of performing his activities in which case only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State; or b.    if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 90 days during any fiscal year. 2.     The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. Article 16 DEPENDENT PERSONAL SERVICES: 1.     Subject to the provisions of Articles 17, 19, 20 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph (1), remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: a.     the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned, and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and c.     the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3.     Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed only in that State. Article 17 DIRECTORS' FEES: Directors' fees and similar payments derived by a resident of one of the Contracting States in his capacity as a member of the board of directors, or other comparable body however described, of a company which is a resident of the other Contracting State, may be taxed in that other State. Article 18 INCOME EARNED BY ARTISTES & ATHLETES: 1.     Notwithstanding the provisions of Articles 15 and 16, income derived by a resident of a Contracting State as an entertainer such as a theatre, motion picture, radio or television artiste or a musician or as an athlete from his personal activities as such exercised in the other Contracting State, may be taxed in that other Contracting State. 2.     Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income, may, notwithstanding the provisions of Articles 7, 15 and 16, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3.     Notwithstanding the provisions of paragraph 1, income derived by an entertainer or an athlete who is a resident of a Contracting State from his personal activities as such exercised in the other Contracting State, shall be taxable only in the first-mentioned Contracting State, if the activities in the other Contracting State are supported wholly or substantially from the public funds of the first-mentioned Contracting State, including any of its political sub-divisions or local authorities. 4.     Notwithstanding the provisions of paragraph (2) and Articles 7, 15 and 16, where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such in a Contracting State accrues not to the entertainer or athlete himself but to another person, that income shall be taxable only in the other Contracting State, if that other person is supported wholly or substantially from the public funds of that other State, including any of its political sub-divisions or local authorities. Article 19 PENSIONS: 1.     Subject to the provisions of paragraph (2) of Article 20, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. 2.     Notwithstanding the provisions of paragraph (1), pensions and other payments made under the social security legislation of a Contracting State shall be taxable only in that State. Article 20 GOVERNMENT SERVICE: 1.       a.     Remuneration, other than a pension, paid by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:                       i.        is a national of that State; or                      ii.        did not become a resident of that State solely for the purposes of rendering the services. 2.       a.     Any pension paid by, or out of funds created by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. b.    However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3.     The provisions of Articles 16, 17 and 19 shall apply to remuneration and pensions in respect of services rendered in connection with any business carried on by a Contracting State or a political sub-division or a local authority thereof. Article 21 REMUNERATION RECEIVED BY TEACHERS: 1.     Remuneration which a professor or teacher who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State for a period not exceeding two years for the purpose of carrying out advanced study or research or for teaching at a university, college, school or other educational institution receives for such work shall not be taxed in that State, provided that such remuneration is derived by him from outside that State. 2.     This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. Article 22 PAYMENTS RECEIVED BY STUDENTS AND TRAINEES: An individual who is a resident of a Contracting State immediately before making a visit to the other Contracting State and is temporarily present in the other State solely-- 1.     As a student at a recognised university, college, school or other similar recognised educational institution in that other State; or 2.     as a business or technical apprentice; or 3.     as a recipient of a grant, allowance or award for the primary purpose of study, research or training from the Government of either State or from a scientific, educational, religious, or charitable organisation or under a technical assistance programme entered into by the Government of either State, shall be exempt from tax in that other State on: a.     all remittances from abroad for the purposes of his maintenance, education, study, research or training; b.    the amount of such grant, allowance or award; and c.     any remuneration not exceeding an amount equivalent to US $ 3,000 during any fiscal year in respect of services in that other State provided the services are performed in connection with his study, research or training or are necessary for the purpose of his maintenance. Article 23 OTHER INCOME: 1.     Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement shall be taxable only in that State. 2.     The provisions of paragraph (1) shall not apply to income, other than income from immovable property as defined in paragraph (2) of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 3.     Notwithstanding the provisions of paragraphs (1) and (2) items of income of a resident of a Contracting State not dealt with in the foregoing articles of this Convention and arising in the other Contracting State may also be taxed in that other State. CHAPTER IV ELIMINATION OF DOUBLE TAXATION Article 24 ELIMINATION OF DOUBLE TAXATION: 1.     The laws in force in either of the Contracting States shall continue to govern the taxation of income in the respective Contracting States except where express provision to the contrary is made in this Agreement. 2.     In the case of India, double taxation shall be eliminated as follows: Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Malta, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Malta whether directly or by deduction. Such deduction in either case shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable, as the case may be, to the income which may be taxed in Malta. 3.     For the purposes of paragraph (2), the term "income-tax paid in Malta" shall be deemed to include the amount of Malta tax which would, under the laws of Malta and in accordance with this Agreement, have been payable on any income derived from sources in Malta had the income not been taxed at a reduced rate or exempted from Malta tax in accordance with: a.     the Aids to Industries Ordinance, 1959 and the Industrial Development Act, 1988 in so far as they were in force on, and have not been modified since, the date of signature of this Agreement or have been modified only in minor respects so as not to affect their general character; or b.    any other provisions in the Income-tax Act (Cap. 123) or in any other legislation which may subsequently be introduced in Malta in modification of, or in addition to, the existing special incentive laws so far as they are agreed by the competent authorities of the Contracting States to be of a substantially similar character. 4.     In the case of Malta, double taxation shall be eliminated as follows: Subject to the provisions of the law of Malta regarding the allowance of a credit against Malta tax in respect of foreign tax, where, in accordance with the provisions of this Agreement, there is included in a Malta assessment income from sources within India the Indian tax on such income shall be allowed as a credit against the relative Malta tax payable thereon. 5.     For the purposes of the deduction referred to in paragraph (4), the term "Indian tax on such income" shall be deemed to include any amount which would have been payable as Indian tax under the laws of India and in accordance with this Agreement for any year but for an exemption from, or reduction of, tax granted for that year under: a.     Sections 10(4), 10(4B), 10(6)(viia), 10(15)(iv), 10A, 10B, 80(1A), 80HHC, 80HHD, 80HHE of the Income-tax Act, 1961 (43 of 1961), so far as they were in force on, and have not been modified since, the date of the signature of this Agreement, or have been modified only in minor respects so as not to affect their general character; or b.    any other provisions which may be enacted hereafter granting a deduction in computing the taxable income or an exemption or reduction from tax which the competent authorities of the Contracting States agree to be for the purposes of the economic development of India, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character 6.     Where the Agreement provides that income arising in a Contracting State shall be relieved from tax in that State, either in full or in part, and, under the law in force in the other Contracting State, such income is subject to tax by reference to the amount thereof which is remitted to or received in that other State and not by reference to the full amount thereof, then the relief to be allowed in the first-mentioned State shall apply only to so much of the income as is remitted to or received in the other State. 7.     Income which, in accordance with the provisions of this Agreement, is not to be subjected to tax in a Contracting State, may be taken into account for calculating the rate of tax to be imposed in that Contracting State. CHAPTER V SPECIAL PROVISIONS Article 25 NON-DISCRIMINATION: 1.     Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. 2.     The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances or under the same conditions. This provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which an enterprise of the other Contracting State has in the first-mentioned State at a rate of tax which is higher than that imposed on the profits of a similar enterprise of the first-mentioned Contracting State, nor as being in conflict with the provisions of paragraph (3) of Article 7 of this Agreement. 3.     Except where the provisions of paragraph (1) of Article 9, paragraph (7) of Article 11, or paragraph (6) of Article 12 apply, interest, royalties and fees for included services and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. 4.     Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or, any requirements connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances. 5.     Nothing in this Article shall be construed as obliging a Contracting State to grant to individuals who are resident of the other Contracting State any personal allowances, reliefs and reductions for tax purposes on account of civil status, family responsibilities or any other personal circumstances which it grants to its own residents. 6.     In this Article, the term "taxation" means taxes which are the subject of this Agreement. Article 26 MUTUAL AGREEMENT PROCEDURE: 1.     Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph (1) of Article 25, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Agreement. 2.     The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the national laws of the Contracting States. 3.     The competent authorities of the Contracting States shall Endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a commission consisting of representatives of the competent authorities of the Contracting States. Article 27 EXCHANGE OF INFORMATION: 1.     The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement insofar as the taxation there under is not contrary to the Agreement in particular for the prevention of fraud or evasion of such taxes. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State. However, if the information is originally regarded as secret in the transmitting State, it shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement

Iran Double Taxation Avoidance Agreement Agreement between the Government of India and the Imperial Government of Iran through exchange of notes for the avoidance of double taxation of income of enterprises operating aircraft Notification No. dtd. G.S.R. 284(E) 28.5.1973. Whereas the Government of India and the Imperial Government of Iran have concluded an agreement through exchange of notes as set out in the Annexure hereto, for the avoidance of double taxation of income of enterprises operating aircraft; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said agreement shall be given effect to in the Union of India. ANNEXURE Agreed translation of the Note No. 127/18, dated the 29th March, 1973 received from the Imperial Government of Iran by the Government of India:- "The Imperial Ministry of Foreign Affairs presents its compliments to the Embassy of India and with reference to the discussions and corresponding notes exchanged regarding the reciprocal exemption of Indian and Iranian airlines from payment of income-tax has the honour to state; According to the Direct Tax Law of 19 March 1967, foreign air companies may be exempted from payment of income-tax on a reciprocal basis; and in fact considering that no income-tax has been collected from Iranian air companies in India, the Iranian Government has to this date refrained from collecting income-tax from Indian air companies. Thus, as the provisions of reciprocity prescribed in the Direct Tax Law, has been in fact established, as long as the said provision observed by the Indian Government, Indian air companies will be, as before, exempted from the payment of tax derived from the transportation of goods and passengers. It is, therefore, proposed that should the above be agreed to, this Note and the Embassy's reply regarding the application and observance of reciprocity by the Government of India may be cansidered as a temporary agreement between the two parties in respect of exemption from payment of income-tax by the air companies of both parties." Note No. TEH/ COM/203/6/70, dated the 1st April, 1973 issued by the Government of India to the Imperial Government of Iran in reply: "The Embassy of India presents its compliments to the Imperial Ministry of Foreign Affairs and in regards to the question of reciprocal exemption of Indian and Iranian airlines from payment of income-tax, has the honour to refer to their Note No. 127/18, dated March 29, 1973, which reads as follows:------- "The Imperial Ministry of Foreign Affairs presents its compliments to the Embassy of India and with reference to the discussions and corresponding notes exchanged regarding the reciprocal exemption of Indian and Iranian airlines from payment of income-tax has the honour to state: According to the Direct Tax Law of 19 March 1967, foreign air companies may be exempted from payment of income-tax on a reciprocal basis, and in fact considering that no income-tax has been collected from Iranian air companies in India, the Iranian Government has to this date refrained from collecting income-tax from Indian air companies. Thus, as the provisions of reciprocity prescribed in the Direct Tax Law, has been in fact established, as long as the said provision is observed by the Indian Government, Indian air companies will be, as before, exempted from the payment of tax derived from the transportation of goods and passengers. It is, therefore, proposed that should the above be agreed to, this Note and the Embassy's reply regarding the application and observance of reciprocity by the Government of India may be considered as a temporary agreement between the two parties in respect of exemption from payment of income-tax by the air companies of both parties." With reference to this proposal, the Embassy of India has the honour to inform the Imperial Ministry of Foreign Affairs that the Government of India accepts the terms of the foregoing text and considers that that Note and this Note will constitute an agreement between the two Governments for the avoidance of double taxation of income of enterprises operating aircraft, which shall enter into force on this date, pending the conclusion of a general agreement for the avoidance of double taxation of income from various sources including civil aviation. In accord with the purpose of the Notes now exchanged, the Embassy of India has the honour to stress the fact that acceptance by the Government of India is based on the understanding that the exemption in respect of income derived from operation of aircraft in international traffic by Indian airline companies and Iranian airline companies, shall be on the basis of reciprocity and shall apply from the beginning of operation of these airlines in Iran and India respectively and that in case any tax on the aforesaid income has been recovered by either Government as of the date of this agreement, the same shall be refunded by that Government. The Embassy of India avails itself of this opportunity to renew to the Imperial Ministry of Foreign Affairs the assurances of its highest consideration. Download Word Document In English. (Rs.20/-)

Download Word Document In English. (Rs.75/-) Brazil Double Taxation Avoidance Agreement Convention Between the Government of the Republic of India and the Government of the Federative Republic of Brazil for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Notification No. G. S. R. 381(E), dtd. 31.03.1992. Whereas the annexed Convention between the Government of the Republic of India and the Government of the Federative Republic of Brazil for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income has been ratified and the Instruments of Ratification exchanged at Brasilia on 11th March, 1992, as required by Article 28 of the said Convention: Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India. The Government of the Republic of India and the Government of the Federative Republic of Brazil. Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Have agreed as follows: Article 1 PERSONAL SCOPE This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1.     The taxes to which the Convention shall apply are: a.     in the case of Brazil: the federal income-tax, excluding the supplementary income-tax and the tax on activities of minor importance; (hereinafter referred to as "Brazilian tax"); b.    in the case of India:                       i.        the income-tax including any surcharge thereon;                      ii.        the surtax; (hereinafter referred to as "Indian tax"). 2.     The Convention shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the above-mentioned taxes. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws. Article 3 GENERAL DEFINITIONS 1.     For the purposes of this Convention, unless the context otherwise requires: a.     the term "nationals" means:                                       i.        all individuals possessing the nationality of a Contracting State;                                      ii.        all legal persons, partnerships and associations deriving their status as such from the law in force in a Contracting State; b.    the terms "a Contracting State" and "the other Contracting State" mean Brazil or India, as the context requires; c.     the term "person" includes an individual, a company and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States; d.    the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes; e.     the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; f.     the term "international traffic" means any transport by a skip or aircraft operated by an enterprise which has its place of effective management in a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; g.    the term "tax" means Brazilian tax or Indian tax, as the context requires; h.     the term "competent authority" means:                                               i.        in Brazil: the Minister of Finance, the Secretary of Federal Revenue or their authorized representative;                                              ii.        in India: the Central Government in the Ministry of Finance (Department of Revenue) or their authorized representative. 2.     As regards the application of the Convention by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Convention applies. Article 4 FISCAL DOMICILE 1.     For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2.     Where by reason of the provisions of paragraph (1) an individual is a resident of both Contracting States, then his status shall be determined as follows: a.     he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); b.    if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; c.     if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; d.    if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where by reason of the provisions of paragraph (1) a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 1.     For the purposes of this Convention the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2.     The term "permanent establishment" includes especially: a. a place of management; b.a branch; c. an office; d.a factory; e. a workshop; f. a mine, an oil or gas well, a quarry or other place of extraction of natural resources; g.a building site or construction or assembly project which exists for more than six months; h. an installation, drilling rig or ship used for the exploration or exploitation of natural resources, but only if so used for a period of more than six months. 3.     Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include: a. the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; b.the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; c. the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; e. the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character. 4.     Notwithstanding the provisions of paragraphs 1 and 2, where a person--other than an agent of an independent status to whom paragraph (5) applies--is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph (3) which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their, business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise itself or on behalf of that enterprise and other enterprises controlling, controlled by, or subject to the same common control, as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. 5.     The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 6 INCOME FROM IMMOVABLE PROPERTY 1.     Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2.     The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property. 3.     The provisions of paragraph (1) shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraphs (1) and (3) shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS 1.     The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. 2.     Subject to the provisions of paragraph (3), where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 3.     In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, in accordance with the provisions of and subject to the limitations of the taxation laws of the Contracting State concerned. 4.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 5.     Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 SHIPPING AND AIR TRANSPORT 1.     Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contract State in which the place of effective management of the enterprise is situated. 2.     If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident. 3.     The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business, or an international operating agency. 4.     The term "operation of ships or aircraft" shall mean business of transportation of persons, mail, livestock or goods carried on by the owners or lessees or charterers of the ships or aircraft, including the sale of tickets for such transportation on behalf of other enterprises. Article 9 ASSOCIATED ENTERPRISES Where a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Article 10 DIVIDENDS 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is a company which is the beneficial owner of the dividends the tax so charged shall not exceed 15 per cent. of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3.     The term "dividends" as used in this Article means income from shares, "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 4.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, and the holding by virtue of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. 5.     Where a resident of India has a permanent establishment in Brazil, this permanent establishment may be subject to a tax withheld at source in accordance with Brazilian law. However, such a tax cannot exceed 15 per cent. of the gross amount of the profits of that permanent establishment determined after the payment of the corporate tax related to such profits. 6.     Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except in so far as such dividends are paid to a resident of that other State or in so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 INTEREST 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 15 per cent. of the gross amount of the interest. 3.     Notwithstanding the provisions of paragraphs (1) and (2): a. interest arising in a Contracting State and paid to the Government of the other Contracting State, a political sub-division thereof or any agency (including a financial institution) wholly owned by that Government, or political sub-division shall be exempt from tax in the first-mentioned State, unless sub-paragraph (b) applies; b.interest from securities, bonds or debentures issued by the Government of a Contracting State, a political sub-division thereof or any agency (including a financial institution) wholly owned by that Government or political sub-division shall be taxable only in that State. 4.     The term "interest" as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and debt-claims of every kind as well as other income assimilated to income from money lent by the taxation law of the Contracting State in which the income arises. 5.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the interest, being a resident of a Contracting State carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein and the debtclaim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply. 6.     The tax rate limitation provided for in paragraph (2) shall not apply to interest arising in a Contracting State and paid to a permanent establishment of an enterprise of the other Contracting State which is situated in a third State. 7.     Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated. 8.     Where, by a reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 12 ROYALTIES 1.     Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties, the tax so charged shall not exceed: a. 25 per cent. of the gross amount of the royalties arising from the use or the right to use trade marks; b.15 per cent. of the gross amount of the royalties in all other cases. 3.     The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work (including cinematography films, films or tapes for television or radio broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4.     The provisions of paragraphs (1) and (2) shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such cases, the provisions of Article 7 shall apply. 5.     Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated. 6.     Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the lastmentioned amount. In such cases, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 CAPITAL GAINS 1.     Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6, which is situated in the other Contracting State, may be taxed in that other State. 2.     Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in the other State. However, gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 3.     Gains from the alienation of any property other than that referred to in paragraphs (1) and (2), may be taxed in both Contracting States Article 14 INDEPENDENT PERSONAL SERVICES 1.     Income derived by a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State, unless the remuneration for such services or activities is paid by a resident of the other Contracting State or is borne by a permanent establishment situated therein. In such case, the income may be taxed in that other State. 2.     The term "professional services" includes especially independent scientific, technical, literary, artistic, educational or teaching activities of physicians, lawyers, engineers, architects, dentists and accountants. Article 15 DEPENDENT PERSONAL SERVICES 1.     Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first mentioned State if: a. the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned, and b.the remuneration is paid by, or on behalf an employer who is not a resident of the other State, and c. the remuneration is not borne by a permanent establishment which the employer has in the other State. 3.     Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated. Article 16 DIRECTORS' FEES Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or of any council of a company which is a resident of the other Contracting State may be taxed in that other State. Article 17 ARTISTES AND ATHLETES 1.     Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as theatre, motion picture, radio or television artiste, or a musician, or as an, athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2.     Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised. 3.     The provisions of paragraphs 1 and 2 of this Article shall not apply to income derived from activities performed in a Contracting State by an entertainer or an athlete if the visit to that Contracting State is substantially supported by public funds of, or sponsored by, the other Contracting State, including those of any political sub-division or local authority. Article 18 PENSIONS AND SOCIAL SECURITY PAYMENTS 1.     Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration, alimony and annuities paid to a resident of a Contracting State may be taxed in that State. 2.     However, such pensions and other similar remuneration, alimony and annuities may also be taxed in the other Contracting State if the payment is made by a resident of that other State or a permanent establishment situated therein.1 3.     Notwithstanding the provisions of paragraphs 1 and 2, pensions paid and other payments made under a public scheme which is part of the social security system of a Contracting State or a political sub-division or a local authority thereof shall be taxable only in that State. 4.     As used in this Article: a. the term "pensions and other similar remuneration" means periodic payments made in consideration of past employment or by way of compensation for injuries in connection with past employment; b.the term "annuities" means stated sums payable periodically at stated times during life, or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth. Article 19 GOVERNMENTAL PAYMENTS 1.     Remuneration not including pensions, paid by a Contracting State, a political sub-division or a local authority thereof to an individual in respect of services rendered to that State, to a political sub-division or local authority shall be taxable only in that State. However, such remuneration shall be taxable only in the Contracting State of which the recipient is a resident if the services are rendered in that State and the recipient of the remuneration is a resident of that State who-- a. is a national of that State, or b.did not become a resident of that State solely for the purpose of performing the services. 2.     Pensions paid by, or out of funds created by, a Contracting State, a political sub-division or a local authority thereof to an individual in respect of services rendered to that State, to a political sub-division or a local authority thereof may be taxed in that State. 3.     The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions paid in respect of services rendered in connection with any business carried on by a Contracting State, a political sub-division or a local authority thereof. Article 20 TEACHERS AND RESEARCHERS 1.     An individual who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who, at the invitation of the Government of the first-mentioned State or of a university, college, school, museum or other cultural institution of that first-mentioned State or under an official programme of cultural exchange, is present in that State for a period not exceeding two consecutive years solely for the purpose of teaching, giving lectures or carrying out research at such institution shall be exempt from tax in that State on his remuneration for such activity, provided that the payment of such remuneration is derived by him from outside that State. 2.     This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. Article 21 STUDENTS AND APPRENTICES 1.     Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State. 2.     In respect of grants, scholarships and remuneration from employment not covered by paragraph 1, a student or business apprentice described in paragraph 1 shall, in addition, be entitled during such education or training to the same exemptions, reliefs or reductions in respect of taxes available to residents of the State which he is visiting. 3.     The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken, but in no event shall any individual have the benefits of this Article, for more than five consecutive years from the date of his first arrival in that State. Article 22 OTHER INCOME Items of income of a resident of a Contracting State, arising in the other Contracting State and not dealt with in the foregoing Articles of this Convention, may be taxed in that other State. Article 23 METHODS FOR THE ELIMINATION OF DOUBLE TAXATION 1.     Subject to the provisions of paragraphs 3 and 4, where a resident of a Contracting State derives income which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first-mentioned State shall allow as a deduction from the tax on the income of that resident an amount equal to the tax paid in that other State. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is attributable to the income which may be taxed in that other State. 2.     For the deduction mentioned in paragraph 1, the tax paid in that other State shall always be deemed to have been paid at the rate of 25 per cent. of the gross amount of interest referred to in paragraph 2 of Article 11 and of royalties referred to in paragraph 2b of Article 12, provided, however, that the tax so deemed to have been paid shall not exceed the tax livable on that income in the first-mentioned State. 3.     Where a company which is a resident of a Contracting State derives dividends which, in accordance with the provisions of paragraph 2 of Article 10, may be taxed in the other Contracting State, the first-mentioned State shall exempt such dividends from tax. 4.     Where a resident of India derives profits which, in accordance with the provisions of paragraph 5 of Article 10 may be taxed in Brazil, India, shall exempt such profits from tax. Article 24 NON-DISCRIMINATION 1.     Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. 2.     The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents. 3.     Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of a third State, are or may be subjected. 4.     In this Article, the term "taxation" means taxes to which this Convention applies. Article 25 MUTUAL AGREEMENT PROCEDURE 1.     Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. This case must be presented within five years of the date of receipt of notice of the action which gives rise to taxation not in accordance with this Convention. 2.     The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to avoidance of taxation not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the national laws of the Contracting States. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a commission consisting of representatives of the competent authorities of the Contracting States. Article 26 EXCHANGE OF INFORMATION 1.     The competent authorities of the Contracting States shall exchange such information (including documents) as is necessary for carrying out the provisions of the Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention, in so far as the taxation thereunder is not contrary to the Convention, in particular for the prevention of fraud or evasion of such taxes. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State. However, if the information is originally regarded as secret in the transmitting State, it shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes which are the subject of the Convention. Such persons or authorities shall use the information only for such purposes but may disclose the information in public court proceedings or in judicial decisions. The competent authorities shall, through consultation, develop appropriate conditions, methods and techniques concerning the matters in respect of which such exchange of information shall be made, including, where appropriate, exchange of information regarding tax avoidance. 2.     In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State, the obligation: a. to carry out administrative measures at variance with the laws or administrative practice of that or of the other Contracting State; b.to supply information or documents which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; c. to supply information or documents which would disclose any trade, business, industrial, commercial or professional secret or trade process or information the disclosure of which would be contrary to public policy. Article 27 DIPLOMATIC AGENTS AND CONSULAR OFFICERS Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special agreements. Article 28 ENTRY INTO FORCE 1.     This Convention shall be ratified and the instruments of ratification shall be exchanged at Brasilia as soon as possible. 2.     This Convention shall enter into force upon the exchange of instruments of ratification and its provisions shall have effect for the first time: 1 a. In Brazil:                                                       i.        in respect of taxes withheld at source, to amounts paid or credited on or after the first day of January of the calendar year immediately following that in which the Convention enters into force;                                                      ii.        in respect of other taxes covered by the Convention, for the taxable year beginning on or after the first day of January of the calendar year immediately following that in which the Convention enters into force. b.    In India: In respect of income arising in any previous year beginning on or after the first day of April immediately following the calendar year in which the Convention enters into force. Article 29 TERMINATION Either Contracting State may terminate this Convention after a period of five years from the date on which the Convention enters into force by giving to the other Contracting State, through diplomatic channels, a written notice of termination, provided that any such notice shall be given only on or before the thirtieth day of June in any calendar year. In such case, the Convention shall cease to have effect: a.     In Brazil: I.      in respect of taxes withheld at source, to amounts paid or credited on or after the first day of January of the calendar year immediately following that in which the notice of termination is given; II.     in respect of other taxes, for taxable years beginning on or after the first day of January of the calendar year immediately following that in which the notice of termination is given. b.    In India: In respect of income arising in any previous year beginning on or after first day of April immediately following the calendar year in which the notice is given. In witness whereof the undersigned being duly authorised thereto have signed this Convention. Done at New Delhi this 26th day of April, 1988, in duplicate in Hindi, Portuguese and English languages, all three texts being equally authentic. In case of any divergence of interpretation the English text shall prevail. For the Government of the For the Government of the Republic of India Federative Republic of Brazil P. K. Appachoo PROTOCOL At the moment of the signature of the Convention between the Republic of India and the Federative Republic of Brazil for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income the undersigned, being duly autliorised thereto, have agreed upon the following provisions which constitute an integral part of the Convention. 1.     With reference to Article 3, paragraph 1, item (q): It is understood that the term "tax" shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Convention applies or which represents a penalty imposed relating to those taxes. 2.     With reference to Article 12, paragraph 3: It is understood that the provisions of paragraph 3 of Article 12 shall apply to payments of any kind to any person, other than payments to an employee of a person making such payments, in consideration for the rendering of assistance or services of a managerial, administrative, scientific, technical or consultancy nature. 3.     With reference to Article 20: It is understood that the terms "museum or other cultural institution" shall refer only to such organisations which have been approved in this regard by the competent authority of the Contracting State concerned. 4.     With reference to Article 24, paragraph 2: It is understood that the provisions of paragraph 5 of Article 10 are not in conflict with the provisions of paragraph 2 of Article 24. 5.     It is understood that either Contracting State may, at any time not earlier than ten years from the date on which the Convention enters into force, seek to review any or all of its provisions, by notice in writing through competent authority thereof to the competent authority of the other Contracting State. The competent authorities shall, within a period of six months thereafter, initiate appropriate proceedings for such review. In witness whereof the undersigned being duly authorised thereto have signed this Protocol. Done at New Delhi this, 26th day of April, 1988, in duplicate in Hindi, Portuguese and English languages, all three texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail. For the Government of the For the Government of the Republic of India Federative Republic of Brazil P. K. Appachoo (Sd.) N. C. Jain, Joint Secretary to the Government of India [Notification No. 9020/F. No. 501/4/84-FTD]

Download Word Document In English. (Rs.75/-) Russian Federation Double Taxation Avoidance Agreement Income-Tax Act, 1961: Notification under section 90: Agreement Between the Government of Republic of the India and the Government of the Russian Federation for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income Notification No. G. S. R. 507(E), dtd. 21.8.1998 Whereas the annexed agreement between the Government of the Russian Federation and the Government of the Republic of India for the avoidance of double taxation with regard to taxes on income has entered into force on the eleventh day of April, 1998, thirty days after the receipt of the later of the notifications by both the Contracting States to each other of the completion of the procedures required under their respective laws for entry into force of the said agreement in accordance with Article 28 of the said agreement; Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43. of 1961), the Central Government hereby directs that all the provisions of the said agreement shall be given effect to in the Union of India. ANNEXURE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE RUSSIAN FEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Russian Federation, desiring to conclude an Agreement for the avoidance of double taxation with respect to taxes on income and with a view to promoting economic co-operation between the two countries, have agreed as follows: Article 1 PERSONAL SCOPE This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1.     This Agreement shall apply to taxes on income imposed in each Contracting State. 2.     The taxes to which this Agreement shall apply are in particular: a.      In the case of the Russian Federation:                       i.        taxes on profits (income) of enterprises and organisations; and                      ii.        the income tax on individuals. (hereinafter referred to as "Russian tax") b.     In the case of India: Income-tax, including any surcharge thereon. (hereinafter referred to as "Indian tax"). 3.     This Agreement shall apply also to any identical or substantially similar taxes on income which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, the taxes referred to in paragraph 2. The competent authorities of the Contracting States shall notify each other of any substantial changes which are made in their respective taxation laws. Article 3 GENERAL DEFINITIONS 1.     In this Agreement, unless the context otherwise requires a.     the term "the Russian Federation (Russia)" means the territory of the Russian Federation and includes its internal waters, territorial sea and air space above them as well as exclusive economic zone and continental shelf within which the Russian Federation has and exercises sovereign rights and jurisdiction in accordance with its national legislation and international law including the 1982 United Nations Convention on the Law of the Sea, and where its tax legislation is applicable; b.    the term "India" means the territory of India and includes its internal waters, territorial sea and air space above them as well as exclusive economic zone and continental shelf within which the Republic of India has and exercises sovereign rights and jurisdiction in accordance with its national legislation and international law including the 1982 United Nations Convention on the Law of the Sea, and where its tax legislation is applicable; c.     the terms "a Contracting State:, and "the other Contracting State" means the Russian Federation or India, as the context requires; d.    the term "person" includes an individual, an enterprise, a company and any other entity which is treated as a taxable unit under the taxation laws in force in a Contracting State; e.     the term "company" means any body corporate or any entity which is treated as a company or body corporate under the taxation laws in a Contracting State; f.     the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; g.    the term "national" means:                       i.        in the case of the Russian Federation, any individual possessing the citizenship of the Russian Federation, and in the case of India, any individual possessing the nationality of India;                      ii.        any person, partnership and association deriving its status as such from the laws in force in a Contracting State; h.     the term "international traffic" means any transportation by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; i.      the term "tax" means Russian tax or Indian tax, as the context requires, but shall not include any penalty or interest imposed under the laws of either Contracting State in relation to the taxes which are the subject of this Agreement; j.      the term "fiscal year" means:                       i.        in the case of the Russian Federation, the financial year, beginning on the 1st of January;                      ii.        in the case of India, the financial year beginning on the 1st of April; k.     the term "competent authority" means:                       i.        in the case of the Russian Federation-the Ministry of Finance or its authorised representative;                      ii.        in the case of India-the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative. 2.     As regards the application of this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State primarily concerning the taxes to which the Agreement applies. Article 4 RESIDENT 1.     For the purposes of this Agreement, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of registration, place of management or any other similar criterion. 2.     Where, by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows: a.     he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); b.    if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the State in which he has an habitual abode; c.     if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; d.    if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where, by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 1.     For the purposes of this Agreement, the term "permanent establishment means a fixed place of business through which the business of the enterprise is wholly or partly carried on. 2.     The term "permanent establishment" includes especially: a.     place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop; f.     a mine, an oil or gas well; a quarry or any other place of extraction of natural resources; g.    an installation or structure used for the exploration or exploitation of natural resources; h.     a farm, plantation or other place where agriculture, forestry, plantation or related activities are carried on; i.      a premises used as a sales outlet or for receiving or soliciting orders; j.      a building site or construction; installation or assembly project or supervisory activities in connection therewith, but only if such site, project or activities continue for a period of more than 12 months. However, the competent authorities of the Contracting States may, in particular cases, agree by mutual agreement to consider the supervisory activities in connection with a building site or construction, installation or assembly project as not constituting a permanent establishment also in the cases in which the duration or work on a building site or construction, installation or assembly project exceeds 12 months. 3.     Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include: a.     the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprises solely for the purposes of storage or display; c.     he maintenance of a stock of goods or merchandise belonging to the enterprises solely for the purposes of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research or for similar activities which have a preparatory or an auxiliary character; f.     the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e). 4.     Notwithstanding the provisions of paragraphs 1 and 2, where a person-other than an agent of an independent status to whom paragraph 5 applies is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if- a.     he has, and habitually exercises in that State, an authority to conclude contracts or carry on any business activities on behalf of the enterprise, unless his activities are limited to those specified in paragraph 3 of this Article; or b.    he habitually secures orders for the sale of goods or merchandise in that State exclusively or almost exclusively on behalf of the enterprise or other enterprise controlled by it or which have a controlling interest in it; or c.     he has no such authority, but habitually maintains in the first mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or d.    in acting as described in (b) above he manufactures or process in that State for the enterprise, goods or merchandise belonging to the enterprise. 5.     An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise itself or on behalf of that enterprise and other enterprises controlling, controlled by, or subject to the same common control as that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. 6.     The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 6 INCOME FROM IMMOVABLE PROPERTY 1.     Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be also taxed in that other State. 2.     The term "immovable property" shall have the meaning which it has under the laws of the Contracting State in which the property in question is situated. Ships, boats, aircraft and road vehicles shall not be regarded as immovable property. The term "immovable property" shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources. 3.     The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraph 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS 1.     The profits derived in a Contracting State by an enterprise of the other Contracting State may be taxed in the first-mentioned State only if it is derived through a permanent establishment situated therein and only so much of them as is attributable to the activity of such permanent establishment. 2.     Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall, in each Contracting State, be attributed to, that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 3.     In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses, so incurred, whether in the State in which the permanent establishment is situated or elsewhere in accordance with the provisions of and subject to the limitations of the taxation laws of that State. 4.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 5.     For the purposes of the preceding paragraphs of this Article, the profits to be attributed to the permanent establishment shall be determined by the same method every year unless there is good and sufficient reason to the contrary. 6.     Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 INCOME FROM INTERNATIONAL TRANSPORT 1.     Income derived by an enterprise of a Contracting State from the operation or rental of ships or aircraft in international traffic and the rental of containers and related equipment which is incidental to the operation of ships or aircraft in international traffic shall be taxable Only in that Contracting State. 2.     The provisions of paragraph 1 shall also apply to income from the participation in a pool, joint business or an international operating agency. 3.     For the purposes of this Article, interest on funds connected directly with the operation. of ships or aircraft in international traffic shall be regarded as income derived from the operation of such ships or aircraft; and the provisions of Article 11 shall also not apply in relation to such interest, provided that such funds are incidental to that operation. 4.     Notwithstanding the preceding provisions of this Article, income derived by an enterprise of a Contracting State from the operation of ships between the ports of the other Contracting State and the ports of third countries may be taxed in that other Contracting State, but the tax imposed in that other State shall be reduced by an amount equal to two thirds thereof. Article 9 ASSOCIATED ENTERPRISES Where: a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Article 10 DIVIDENDS 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is subject to tax thereon in the other State, the tax so charged shall not exceed 10 per cent. of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3.     The term "dividends" as used in this Article means income from shares, or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 4.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment, or performs independent personal services from a fixed base situated therein and the dividends are attributable to such permanent establishment or fixed base. In such case the provisions of Article 7 or 14 of this Agreement, as the case may be, shall apply. 5.     Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company except in so far as such dividends are paid to a resident of that other State or so far as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 INTEREST 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent. of the gross amount of the interest. 3.     Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially owned by:               i.        the Government, a political sub-division or a local authority of the other Contracting State; or              ii.        the Central Bank of the other Contracting State; or             iii.        the other Governmental agencies or financial institutions as may be specified and agreed to in an exchange of notes between the competent authorities of the Contracting States. 4.     The term "interest" as used in this Article means income from debt claims of every kind, and in particular income from Government securities, bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment or performs independent personal services from a fixed base situated therein and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Articles 7 or 14 of this Agreement, as the case may be, shall apply. 6.     Interest shall be deemed to arise in a Contracting State when the payer is the Contracting State itself, a political sub-division, a local authority thereof or a resident of that Contracting State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or a fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated. 7.     Where by reason of a special relationship between the payer and the beneficial owner of interest or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 12 ROYALTIES AND FEES FOR TECHNICAL SERVICES 1.     Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed 10 per cent. of the gross amount of the royalties or fees for technical services. 3.     The term "royalties" as used in this Article means: a.     payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematography films or recording on any means of reproduction for use in connection with radio or television broadcasting, any patent, trade mark, design or model, plan, know-how, computer software programme, secret formula or process, or for information concerning industrial, commercial or scientific experience. b.    payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial or scientific equipment. 4.     For the purposes of this Article, "fees for technical services" means payments of any kind in consideration for the rendering of any managerial, technical or consultancy services including the provision of services by technical or other personnel but does not include payments for services mentioned in Articles 14 and 15 of this Agreement. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through, a permanent establishment situated therein, or performs in that of the State independent personal services from a fixed base situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 6.     Royalties and fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, a local authority or a resident of that state. Where, however, the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fee's for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7.     Where by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of royalties or fees for technical services paid exceeds the amount which would have been paid in the absence of such relationship, the provisions of this Article shall apply only to the last mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 13 CAPITAL GAINS 1.     Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may also be taxed in that other State. 2.     Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other State. 3.     Gains derived from the alienation of ships or aircraft operated in international traffic or movable property pertaining to such operation shall be taxable only in the Contracting State of which the alienator is a resident. 4.     Gains from the alienation of shares of a company, which is a resident of a Contracting State may be taxed in that State. 5.     Gains from the alienation of any property other than that mentioned in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 INDEPENDENT PERSONAL SERVICES 1.     Income derived by a resident of a Contracting State from the performance of professional services or other activities of an independent character in the other Contracting State shall be taxable only in the first mentioned State, unless: a.     such services are performed or were performed in the other Contracting State and the income is attributable to a fixed base which the individual has or had regularly available to him in that other State b.    the recipient is present in the other Contracting State for a period or periods exceeding in the aggregate 183 days in any 12 month period. 2.     The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as independent activities of physicians, surgeons, dentists, engineers, architects, lawyers and accountants. Article 15 DEPENDENT PERSONAL SERVICES 1.     Subject to the provisions of Articles 16, 18 and 19 salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable in the first mentioned State if: a.     the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in any 12 month period; and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other Contracting State; and c.     the remuneration is not borne by a permanent establishment or fixed base which the employer has in the other Contracting State. 3.     Notwithstanding the preceding provisions of this Article, the remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by the enterprise of a Contracting State may be taxed in that State. Article 16 DIRECTORS' FEES Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State. Article 17 INCOME OF ENTERTAINERS AND SPORTSMEN 1.     Notwithstanding the provisions of Articles 7, 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman from his personal activities as such exercised in the other Contracting State may be taxed in that other State. 2.     Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15 be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised. 3.     Notwithstanding the provisions of paragraphs 1 and 2, income derived by an entertainer or a sportsman who is a resident of a Contracting State from his personal activities as such exercised in the other contracting State, shall be taxable only in the first-mentioned Contracting State, if the activities in the other Contracting State are financed wholly or substantially by the first-mentioned Contracting State, including any of its political sub-divisions or local authorities. Article 18 INCOME FROM GOVERNMENT SERVICE 1.       a.     Remuneration, other than pension, paid by a Government of a Contracting State, a political sub-division or a local authority thereof to an individual in respect of services rendered to that State, political subdivision or local authority thereof shall be taxable only in that State. b.    However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other State and the individual is a resident of that State who:                       i.        is a national of that State; or                      ii.        did not become a resident of that State sole for the purpose of rendering the services. 2.     a.     Any pension paid by, or out of funds created by, a Contracting State or a political sub-division or a local authority thereof, to an individual in respect of services rendered to that State or sub-division or authority thereof shall be taxable only in that State; b.    However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that other State. 3.     The provisions of Articles 15, 16 and 19 shall apply to remuneration and pension in respect of services rendered in connection with a business carried on by a Contracting State or a political sub-division or a local authority thereof. Article 19 PENSIONS AND ANNUITIES 1.     Pensions, other than those referred to in Article 18, and other similar remuneration paid in consideration of past employment to resident of a Contracting State and any annuity paid to such a resident shall be taxable only in the State where such income is derived. 2.     The term 'annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make payments in return for adequate and full consideration in money or money's worth. Article 20 STUDENTS AND TRAINEES 1.     A student or business apprentice who immediately before visiting a Contracting State is or was a resident of the other Contracting State and who is present in the first mentioned State solely for the purpose of his education or training, shall be exempted from tax in that first-mentioned State, provided that such payments are received from outside that State. 2.     An individual who immediately before visiting a Contracting State, is or was a resident of the other Contracting State and who is present in the first-mentioned State for a period not exceeding two years solely for the purpose of study, research or training as a recipient of a grant, allowance or award from a scientific, educational, religious or charitable organisation or under a technical assistance programme entered into by the Government of that other Contracting State shall, from the date of his arrival in the first-mentioned State in connection with that visit, be exempt from tax in the first-mentioned State. Article 21 PROFESSORS, TEACHERS AND RESEARCHERS 1.     A professor, teacher or researcher who visits one of the Contracting States for the purpose of teaching or engaging in research at a university or any other educational institution approved by the Government in that State and who, immediately before that visit, was a resident of the other Contracting State shall be exempted from tax by the first-mentioned State in respect of any remuneration received for such teaching or research for a period not exceeding two years from the date of his first arrival in that State for such purpose. 2.     This article shall not apply to income from research if such research is undertaken not in the public interest but primarily for the benefit of a specific person or persons. Article 22 OTHER INCOME 1.     Items of income of a resident of a Contracting State, wherever arising which are not dealt with in the foi.egoing'Articles of this Agreement, shall be taxable only in that Contracting State. 2.     The provisions of paragraph 1 shall not apply to income other than income from immovable property as defined in paragraph 2 of Article 6, if the beneficial owner of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 3.     Notwithstanding the provisions of paragraphs 1 and 2, any income in the form of winnings or prizes from lotteries, crossword puzzles, races including horse races, card games and other games of any form or nature whatsoever may be taxed in the Contracting State where they arise. Article 23 METHODS OF ELIMINATION OF DOUBLE TAXATION 1.     In the case of Russia double taxation is eliminated as follows: Where a resident of Russia derives income which in accordance with the provisions of this Agreement, may be taxed in India, the amount of tax on that income payable in India may be credited against the tax imposed on that resident of Russia. The amount of credit, however, shall not exceed the amount of the tax on that income computed in accordance with the taxation laws and regulations of Russia. 2.     In the case of India, double taxation shall be eliminated as follows: Where a resident of India derives income which in accordance with the provisions of this Agreement, may be taxed in Russia, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Russia whether directly or by deduction at source. Such deduction in either case shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable to the income which may be taxed in Russia. 3.     For the purposes of this article the term "tax" paid or payable as mentioned in paragraphs 1 and 2 of this article shall be deemed to include the tax which would have been paid but for any exemption or reduction of tax granted under incentive provisions contained in the law of a Contracting State designed to promote economic development to the extent that such exemption or reduction is granted for profits from industrial construction, manufacturing or agricultural activities provided that the activities have been carried out within the Contracting State. The competent authorities may agree to extend the application of this provision also to other activities. The provisions of this paragraph shall apply only for the first ten years during which this Agreement is effective. This period may be extended by a mutual agreement between the competent authorities. Article 24 NON-DISCRIMINATION 1.     Nationals of a Contracting State shall not be subjected in the other Contracting State, to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1 also apply to persons who are not residents of one or both of the Contracting States. 2.     The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances and under the same conditions. 3.     Nothing contained in this Article shall be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own. 4.     Except where the provisions of Article paragraph 7 of Article 11 or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall for the purpose of determining the taxable profits of such enterprise, he deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. 5.     Enterprises of a Contracting State the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State may be subjected in the same circumstances and under the same conditions. 6.     The provisions of this Article, shall apply to taxes which are the subject of this Agreement. Article 25 MUTUAL AGREEMENT PROCEDURE 1.     Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or a national. The case must be presented within three years from the date of the first notification of the action resulting in taxation not in accordance with the provisions of this Agreement. 2.     The competent authority shall end over, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits provided in the domestic laws of the Contracting States. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult with each other for the elimination of double taxation in cases not provided for in this Agreement. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. Article 26 EXCHANGE OF INFORMATION 1.     The competent authorities of the, Contracting States shall exchange such information (including documents) as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes Covered by the Agreement, in so far as the taxation there under is not contrary to the Agreement, in particular for the prevention of fraud or evasion Of such taxes. Any information received by a Contracting State shall be treated as confidential in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment, or collection of, the enforcement or Prosecution in respect of, or the determination Of appeals in relation to, the taxes covered by the Agreement. Such persons or authorities shall use the information only for such Purposes, but may disclose the information in Public court proceedincial decisions. 2.     The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases of both. The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine bases. 3.     In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: a.     to carry out administrative measures at variance with the laws and administrative practice of that or the other Contracting State; b.    to supply information which is not obtainable under the laws or' in the normal course of the administration of that or of the other Contracting State c.     to supply information which would disclose any trade, business, industrial, commercial or Professional secret', or trade process, or information, the disclosure of which would be contrary to public policy. Article 27 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Agreement shall affect the fiscal privileges of diplomatic missions or consular posts or other persons for whom they are provided under the rules of international law, or under the provisions of special agreements. Article 28 ENTRY INTO FORCE 1.     The Contracting States shall notify each other in writing, through diplomatic channels, of the completion of the procedure required by the respective laws for the entry into force of this Agreement. 2.     This Agreement shall enter into force thirty days after the receipt of the later of the notifications referred to in paragraph 1 of this Article. 3.     The provisions of this Agreement shall have effect: a.       In Russia:                       i.        in respect of taxes withheld at sources, to income arising on or after the first day of January in the calendar year next following the year in which this Agreement enters into force;                      ii.        in respect of other taxes on income, to taxes arising for any fiscal year beginning on or after the first day of January next following the calendar year in which this Agreement enters into force. b.      In India: in respect of income arising in any fiscal year beginning or after the first day of April next following the calendar year in which the Agreement enters into force; 4.     The provisions of the Agreement between the Government of the Union of the Soviet Socialist Republics and the Government of the Republic of India for the avoidance of double taxation of income signed in New Delhi on 20th of November, 1988, and subsequently ex tended to the Russian Federation on the basis of mutual agreement of the Contracting States shall cease to have effect on the date of coming into force of this Agreement. Article 29 TERMINATION 1.     This Agreement shall remain in force unless terminated by a Contracting State. Either Contracting State may terminate this Agreement, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year after the expiration of a period of five years from the date of its entry into force. 2.     This Agreement shall cease to have effect: a.       In Russia:                       i.        in respect of taxes withheld at source, to income arising on or after the first day of January in the calendar year next following the year in which the notice of termination is given;                      ii.        in respect of other taxes on income, to taxes arising for any fiscal year beginning on or after the first day of January in the calendar year next following the year in which the notice of termination is given. b.      In India: in respect of income arising in any fiscal year beginning on or after the first day of April next following the calendar year in which the notice of termination is given. Done at Moscow

Download Word Document In English. (Rs.80/-) Ireland Double Taxation Avoidance Agreement Section 90 of the Income-tax Act, 1961 - Double Taxation Agree衫ent - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - With Ireland Notification No. 45/2002 [F. No. 503/6/99-FTD], Dated 20-2-2002 Whereas the annexed Convention between the Government of the Republic of India and the Government of Ireland for the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with respect to taxes on income and capital gains has entered into force on 26th December, 2001, thirty days after the receipt of the later of the notifications by both the Contracting State to each other of the completion of the procedure required by their respective laws, as required by Article 28 of the said Convention. Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India. ANNEXURE Convention between the Government of the Republic of India and the Government of Ireland For the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with respect to taxes on Income and Capital Gains The Government of the Republic of India and the Government of Ireland, desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and capital gains and with a view to promoting economic co-operation between the two countries, have agreed as follows: Article 1 SCOPE OF THE CONVENTION 1.     This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1.     This Convention shall apply to taxes on income and capital gains imposed on behalf of a Contracting State or of its political sub-divisions or local authorities irrespective of the manner in which they are levied. 2.     There shall be regarded as taxes on income and capital gains all taxes imposed on total income, or on elements of income including taxes on gains from the alienation of movable or immovable property. 3.     The existing taxes to which the Convention shall apply are in particular: a.     In India: The income-tax including any surcharge thereon;( hereinafter referred to as "Indian tax"); b.    In Ireland:                               i.        the income tax;                              ii.        the corporation tax; and                             iii.        the capital gains tax (hereinafter referred to as "Irish tax"). 4.     The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of significant changes which have been made in their respective taxation laws. Article 3 GENERAL DEFINITIONS 1.     For the purposes of this Convention, unless the context otherwise requires: a.     the term "India" means the territory of India and includes the territorial sea and airspace above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdiction, according to the Indian law and in accordance with international law, including the U.N. Convention on the Law of the Sea; b.    the term "Ireland" includes any area outside the territorial waters of Ireland which, in accordance with international law, has been or may hereafter be designated under the laws of Ireland concerning the Continental Shelf, as an area within which the rights of Ireland with respect to the sea and sub-soil and their natural resources may be exercised; c.     the term "person" includes an individual a company, a trust, a partnership which is treated as a taxable until under the Income-tax Act, 1961 (43 of 1961) of India, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States; d.    the term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes; e.     the terms "enterprise" of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; f.     the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; g.    the term "competent authority" means:                               i.        in the case of India: the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative;                              ii.        in the case of Ireland: the Revenue Commissioners or their authorised representative; h.     the term "national" means:                               i.        in relation to Ireland, any citizen of Ireland and any legal person, association or other entity deriving its status as such from the laws in force in Ireland;                              ii.        in relation to India (A) any individual possessing the nationality of India; (B) any legal person, partnership or association deriving its status as such from the laws in force in India; i.      the term "fiscal years" means:                               i.        in the case of India, "previous year" as defined under section 3 of the Income-tax Act, 1961;                              ii.        in the case of Ireland, a year beginning with the sixth day of April in one year and ending with the fifth day of April in the following year; j.      the term "tax" means Indian tax or Irish tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Convention applies or which represents a penalty or fine imposed relating to those taxes; k.     the terms "a Contracting State", "one of the Contracting States" and "the other Contracting State" mean Ireland or the Republic of India, as the context requires, and the term "Contracting States" means Ireland and the Republic of India. 2.     As regards the application of the Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires have the meaning which it has under the law of that State concerning the taxes to which the Convention applies. Article 4 RESIDENT 1.     For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2.     Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows: a.     he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); b.    if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; c.     if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; d.    if he is a national of both States or of neither of them the competent authorities of the Contracting States shall settle the question by mutual agreement. 3.     Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated. If the State in which its place of effective management is situated cannot be determined, then the competent authorities of the Contracting States shall settle the question by mutual agreement. Article 5 PERMANENT ESTABLISHMENT 1.     For the purposes of this Convention, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2.     The term "permanent establishment" includes especially: a.     a place of management; b.    a branch; c.     an office; d.    a factory; e.     a workshop; f.     a mine, an oil or gas well, quarry or other place of extraction of natural resources; g.    an installation or structure used for the exploration or exploitation of natural resources; h.     a sales outlet; i.      a warehouse in relation to a person providing storage facilities for others; and j.      a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on. 3.     A building site or construction or assembly project or supervisory activities in connection therewith constitute a permanent establishment only if such site, project or activity last more than six months.111 4.     An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it provides services or facilities in connection with, or supplies plant and machinery on hire used for or to be used in, the prospecting for, or extraction or exploitation of mineral oils in that State. 5.     Notwithstanding the previous provisions of this Article, he term "permanent establishment" shall be deemed not to include: a.     the use of facilities solely for the purpose of storage display or delivery of goods or merchandise belonging to the enterprise; b.    the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; c.     the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; d.    the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the enterprise; e.     the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; f.     the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. 6.     Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 8 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person: a.     has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 5 which, if exercised through a fixed place of business would not make this fixed place of business a permanent establishment under the provisions of that paragraph; or b.    has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; or c.     habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises controlling, controlled by, or subject to the same control as that enterprise. 7.     Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of an independent status to whom paragraph 8 applies. 8.     An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, if the activities of such an agent are carried out wholly or almost wholly for the enterprise and the conditions made or imposed between them in their commercial and financial relations differ from those which would have been made or imposed if this had not been the case, that agent shall not be considered to be an agent of an independent status for the purpose of this paragraph. 9.     The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State or which carries on business in that other State (whether through a permanent establishment or otherwise) shall not of itself constitute either company a permanent establishment of the other. Article 6 INCOME FROM IMMOVABLE PROPERTY 1.     Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may also be taxed in that other State. 2.     The term "immovable property" shall have the meaning which it has under the laws of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, live-stock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats, aircraft and motor vehicles shall not be regarded as immovable property. 3.     The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4.     The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS 1.     The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may also be taxed in the other State but only so much of them as is attributable to that permanent establishment. 2.     Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 3.     In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, whether in the State in which the permanent establishment is situated or elsewhere. Executive and general administrative expenses shall be allowed as deductions in accordance with the taxation laws of that State. Nothing in this paragraph shall, however authorise a deduction for expenses which would not be deductible if the permanent establishment were a separate enterprise. 4.     No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. 5.     For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 6.     Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 SHIPPING AND AIR TRANSPORT 1.     Profits derived by an enterprise of a Contracting State from the operation or rental of ships or aircraft in international traffic and the rental of containers and related equipment which is incidental to the operation of ships or aircraft in international traffic shall be taxable only in that Contracting State. 2.     The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 3.     For the purposes of this Article, interest on funds connected directly with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of such ships or aircraft; and the provisions of Article 11 shall not apply in relation to such interest provided that such funds are incidental to that operation. 4.     Notwithstanding the preceding provisions of this Article, profits derived by an enterprise of a Contracting State from the operation of ships between the ports of the other Contracting State and the ports of third countries may be taxed in that other Contracting State, but the tax imposed in that other State shall be reduced by an amount equal to two thirds thereof. Article 9 ASSOCIATED ENTERPRISES 1.     Where- a.     an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b.    the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State. and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises but, by reason of those condition, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 2.     Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other. Article 10 DIVIDENDS 1.     Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contacting State may be taxed in that other State. 2.     However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 10 per cent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3.     The term "dividends" as used in this Article includes income from shares or other rights, not being debt-claims, participating in profit, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 4.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividend is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 5.     Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company is undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 INTEREST 1.     Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. 3.     Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that Contracting State provided it is derived and beneficially owned by, or derived in connection with a loan or credit extended, guaranteed or insured by: a.     the Government, a political subdivision, a statutory body or a local authority of the other Contracting State; or b.                            i.        in the case of India, the Reserve Bank of India, the Industrial Finance Corporation of India, the Industrial Development Bank of India, the Export-Import Bank of India the National Housing Bank, the Small Industries Development Bank of India and the Industrial Credit and Investment Corporation of India (ICICI); and                      ii.        in the case of Ireland, the Central Bank of Ireland; or c.     any other similar institution as may be agreed from time to time between the Competent Authorities of the Contracting States. 4.     The term "interest" as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, but does not include any income which is treated as a dividend under Article 10. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 5.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contacting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 6.     Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of the State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated. 7.     Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationships, the provisions of this Article shall apply only to the last mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 12 ROYALTIES AND FEES FOR TECHNICAL SERVICES 1.     Royalties or fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2.     However, such royalties or fees for technical services may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties or fees for technical services. 3.     The terms "royalties" a.     The terms "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematography films or films or tapes for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process or for the use of or the right to use industrial, commercial or scientific equipment, other than an aircraft, or for information concerning industrial, commercial or scientific experience; b.    The term "fees for technical services means payment of any kind in consideration for the rendering of any managerial, technical or consultancy services including the provision of services by technical or other personnel but does not include payments for services mentioned in Articles 14 and 15 of this Convention. 4.     The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 5.     Royalties or fees for technical services shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where however, the person paying the royalties or fees for technical services, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 6.     Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties or fees for technical services, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply to the last-mentioned amount. In such case the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 CAPITAL GAINS 1.     Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may also be taxed in that other State. 2.     Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may also be taxed in that other State. 3.     Gains derived by an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in that State. 4.     Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 5.     Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that Contracting State 6.     Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 INDEPENDENT PERSONAL SERVICES 1.     Income derived by a resident of a Contracting State in respect of professional services or other activities or an independent character shall be taxable only in that State except in the following circumstances, when such income may also be taxed in the other Contracting State: a.     if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or b.    if his stay in the other State is for a period or periods aggregating 183 days or more in any 12-month period commencing or ending in the fiscal year concerned; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State. 2.     The term "professional services" includes especially independent scientific, literacy, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, surgeons, dentists and accountants. 2.Article 15 DEPENDENT PERSONAL SERVICES 1.     Subject to the provisions of Articles 16, 18, 19 and 21, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as it derived therefrom may be taxed in that other State. 2.     Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: a.     the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any 12-month period commencing or ending in the fiscal year concerned, and b.    the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and c.     the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3.     Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that State. Article 16 DIRECTORS' FEES - Directors' 1.     Fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may also be taxed in that other State. Article 17 ARTISTES AND SPORTSPERSONS 1.     Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2.     Where income in respect of personal activities exercised by an entertainer or a sportsperson in his capacity as such accrues not to the entertainer or sportsperson himself but to some other person, that income may, notwithstanding the provisions of Article 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised. 3.     The provisions of paragraphs 1 and 2, shall not apply to income from activities performed in a Contracting State by entertainers or sportspersons if the visit to that State is substantially supported by public funds of one or both of the Contracting States or of political subdivisions or local authorities thereof. In such a case, the income is taxable only in the Contracting State of which the entertainer or sportsperson is a resident. Article 18 PENSIONS AND ANNUITIES 1.     Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment and any annuity paid to such a resident in consideration of past employment shall be taxable only in that State. 2.     The term "annuity" means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money's worth. Article 19 GOVERNMENT SERVICE 1.       a.     Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. b.    However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:                       i.        is a national of that State; or                      ii.        did not become a resident of that State solely for the purpose of rendering the services. 2.       a.     Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State; b.    However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3.     The provisions of Articles 15, 16, and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof. Article 20 STUDENTS AND APPRENTICES 1.     A student or business apprentice who is or was a resident of a Contracting State immediately before visiting the other Contracting State and who is present in that other Contracting State solely for the purpose of his education of training shall be exempt from tax in that other State on: a.     payments made to him by persons residing outside that other State for the purposes of his maintenance, education or training; and b.    remuneration from employment in that other State to the extent that it does not exceed the amount which is exempt from tax under the laws of that other Contracting State for any fiscal year; provided that such employment is directly related to his studies or is undertaken for the purposes of his maintenance. 2.     The benefit of this Article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken but in no event shall any individual have the benefits of this Article for more than six consecutive years from the date of his first arrival in the other Contracting State. Article 21 PROFESSORS, TEACHERS AND RESEARCH SCHOLARS 1.     A professor, teacher of research scholar who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college or other similar institution in that other Contracting State shall be exempt from tax in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date of his first arrival in that other State for such purpose. 2.     This Article shall not apply to income from research, if such research is undertaken primarily for the private benefit of a specific person or persons. 3.     For the purposes of this Article and Article 20, an individual shall be deemed to be a resident of a Contracting State if he is a resident in that Contracting State in the fiscal year in which he visits the other Contracting State or in the immediately preceding fiscal year. Article 22 OTHER INCOME 1.     Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State. 2.     The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14 as the case may be, shall apply. 3.     Notwithstanding the provisions of paragraph 1, if a resident of a Contracting State derives income from sources within the other Contracting State in the form of winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever such income may be taxed in the other Contracting State. Article 23 ELIMINATION OF DOUBLE TAXATION 1.     The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Convention. 2.     Subject to the provisions of the laws of India regarding the allowance as a credit against Indian tax of tax paid in a territory outside India (which shall not affect the general principle hereof), the amount of Irish tax paid, under the laws of Ireland and in accordance with the provisions of this Convention whether directly or by deduction, by a resident of India, in respect of income from sources within Ireland which has been subjected to tax both in India and Ireland shall be allowed as a credit against the Indian tax payable in respect of such income but in an amount not exceeding that proportion of Indian tax which such income bears to the entire income chargeable to Indian tax. 3.     Subject to the provisions of the laws of Ireland regarding the allowance as a credit against Irish tax of tax payable in a territory outside Ireland (which shall not affect the general principle hereof) - a.     Indian tax payable under the laws of India and in accordance with this Convention, whether directly or by deduction, on profits, income and gains from sources within India (excluding in the case of a dividend tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any Irish tax computed by reference to the same profits, income and gains by reference to which Indian tax is computed. b.    In the case of a dividend paid by a company which is a resident of India to a company which is a resident of Ireland and which controls directly or indirectly 25 per cent or more of the voting power in the company paying the dividend, the credit shall take into account [in addition to any Indian tax creditable under the provisions of sub-paragraph (a)] Indian tax payable by the company in respect of the profits out of which such dividend is paid. 4.       a.     For the purposes of sub-paragraph (b) of paragraph 3, the term "Indian tax payable" shall be deemed to include 75 per cent of the Indian tax which would have been paid but for any exemption or reduction of tax granted under incentive provisions contained in Indian law designed to promote economic development to the extent that such exemption or reduction is granted for profits from industrial or manufacturing activities, or from the development, maintenance and operation of infrastructure facilities, or from agriculture, fishing or tourism (including restaurants and hotels), provided that such incentive provisions remain in substance unchanged since the date of signature of this Convention and that the activities have been carried out within India. b.    The provisions of sub-paragraph (a) shall cease to apply after twelve years from the date of entry into force of this Convention. c.     Should India amend in substance its incentive provisions in relation to the activities specified in sub-paragraph (a) or introduce any new incentive provisions in relation to such activities, India may request in writing that this paragraph should apply to such amended or new provisions. Likewise, India may request in writing an extension of the time-limit in sub-paragraph (b). Upon receipt of such request, Ireland shall enter into negotiations with India for such purposes. 5.     For the purposes of paragraphs 2 and 3, profits, income and gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with the provisions of this Convention shall be deemed to arise from sources in that other Contracting State. 6.     Income which in accordance with the provisions of this Convention is not to be subjected to tax in a Contracting State may be taken into account for calculating the rate of tax to be imposed in that Contracting State on other income. Article 24 NON-DISCRIMINATION 1.     Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States. 2.     The Taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. 3.     Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Stated to any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected. 4.     Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Article 25 MUTUAL AGREEMENT PROCEDURE 1.     Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic laws of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention. 2.     The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. 3.     The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. 4.     The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of representatives of the competent authorities of the Contracting States. Article 26 EXCHANGE OF INFORMATION 1.     The competent authorities of the Contracting States shall exchange such information including documents, as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting State concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention in particular for the prevention of fraud or evasion of such taxes. The exchange of information is not restricted by Article 1.Any information so exchanged by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of the State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. The may disclose the information in public court proceedings or in judicial decisions. 2.     In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation. a.     to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State: b.    to supply information or documents which are not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State. c.     to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy. Article 27 DIPLOMATIC AGENTS AND CONSULAR OFFICIALS 1.     Nothing in this convention shall affect the fiscal privileges of diplomatic agents or consular officials under the general rules of international law or under the provisions of special agreements.