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MOROCCO 1607. Agreement for avoidance
of double taxation and prevention of fiscal evasion with Morocco Whereas the annexed Convention between the Government of the Republic of India and the Government of the Kingdom of Morocco for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has come into force on the 20th day of February, 2000, on the notification by both the Contracting States to each other, under Article 29 of the said Convention of the completion of the procedures required by their respective laws for bringing into force 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. Notification : No. G.S.R. 245(E), dated 15-3-2000. Annexure Convention Between the Republic of India and
the The Government
of the Republic of India and the Government of the Kingdom of Morocco 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 : Scope of the
convention - 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 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
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 this Convention
shall apply are in particular. (a) In the Republic of India : the income-tax, including
any surcharge thereon; (hereinafter referred to as
Indian tax) (b) In the Kingdom of Morocco : (i) General income-tax ; (ii) corporation tax ; (iii) the tax on income from the shares or social
parts and assimilated income ; (iv) the tax on immovable property profits ; (v) the participation on the national solidarity ; (vi) the tax on income from fixed yield investments ; (hereinafter referred to as
Moroccan tax). 4. 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 3. 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 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 and, in particular, the
U. N. Convention on the Law of the Sea; (b) the term Morocco means the Kingdom of Morocco; and when used in
geographical sense the term Morocco includes: (i) the territory of the Kingdom of Morocco, the territorial sea
thereof and (ii) the maritime areas beyond the territorial sea, including the
seabed and subsoil thereof (continental shelf) and the exclusive economic zone
over which Morocco exercises sovereign rights, in accordance with its domestic
laws and international law, for the purpose of exploration and exploitation of
the natural resources of such areas; (c) the terms a Contracting State and the other Contracting State
mean India or Morocco as the context requires; (d) the term company means any body corporate or any entity which is
treated as a company or body corporate under the taxation laws in force in the
respective Contracting States; (e) 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 Morocco, the Minister of Finance or his authorised
representative; (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 fiscal year 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 Morocco, a fiscal exercise as defined under the
Laws relating to the General Income-tax and the Corporation Tax; (h) the term international traffic means any transport by a ship or
aircraft operated by an enterprise which is a resident of a Contracting State,
except when the ship or aircraft is operated solely between places in the other
Contracting State; (i) 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; (j) 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; (k) the term tax means Indian tax or Moroccan tax, as the context
requires, but shall not include any amount other than tax 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. 2. As regards
the application of this 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 this 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 or any political sub-division or local
authority thereof is liable to tax therein by reason of his domicile, resident,
place of management or any other criterion of a similar nature. This term,
however, does not include any person who is liable to tax in that State in
respect only of income from sources in that State. 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 only 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 only 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 only 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 only 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 any other place of
extraction of natural resources; (g) a sales outlet; (h) a warehouse in relation to a person providing storage facilities
for others; (i) a farm, plantation or other place where agricultural, forestry,
plantation or related activities are carried on; and (j) a building site or construction or assembly project or supervisory
activities in connection therewith, but only where such site, project or
activity continues for a period of more than eight months. 3. 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. 4. 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 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 of auxiliary character. 5. 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 on behalf
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 4 of this Article, 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. 6. 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 7 applies. 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 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, he will not be considered an agent of an independent
status within the meaning of this paragraph. 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
Contracting 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 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, 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, 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 that permanent
establishment. For the
purposes of this Article, where a permanent establishment takes an active part
in negotiating, concluding or fulfilling contracts entered into by the
enterprise, then notwithstanding that other parts 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. 3. In determining the profits of a permanent
establishment, there shall be allowed as deductions, expenses which are
incurred for the purposes of 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, in accordance
with the provisions of the tax laws, and subject to the limitations laid down
therein. 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 shall preclude that
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
contained 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 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. 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 of ships or aircraft in international
traffic shall be taxable only in that State. 2. Profits derived by a transportation enterprise
which is a resident of a Contracting State from the use, maintenance, or rental
of containers (including trailers and other equipment for the transport of
containers) used for the transport of goods or merchandise in international
traffic shall be taxable only in that Contracting State unless the containers
are used solely within the other Contracting State. 3. For the purposes of this Article, interest on
funds directly connected with the operation of ships or aircraft in international
traffic shall be regarded as profits described in this Article, and the
provisions of Article 11 (interest) shall not apply in relation to such
interest. 4. The provisions of paragraph 1 shall also apply
to profits from the participation in a pool, a joint business or an
international operating agency. 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. 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, than that other State shall make 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 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 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 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 Contracting 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 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 companys undistributed profits to a tax
on the companys undistributed profits, even if the dividends paid or
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 Contracting State. 2. However, such interest may also be taxed in
the Contracting State in which it arises, and according to the laws of that Contracting
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) 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 (iii) in the case of Morocco, the Bank Al-Maghrib
(the Central Bank of Morocco), the Northern Provinces Development Agency, the
Central Popular Bank and its regional agencies, the National Bank of Economic
Development, the Moroccan Bank of Foreign Trade, the Communal Equipment Fund,
the Immovable and Hotel Credit and the Industrial Development Office ? (iv) any other 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 debtors 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 the interest
arises, through a permanent establishment situated therein, or performs in that
other Contracting 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 Contracting State itself, a political
sub-division, a local authority 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 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 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 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 Contracting 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 the 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 a literary, artistic or scientific work,
including cinematograph films or recordings on any means of reproduction for
use for radio or television broadcasting, any patent, trade mark, design or
model, plan, computer software programme, secret formula or process, or for
information concerning industrial, commercial or scientific experience; and (b) payments of any kind received as consideration for the use of, or
the right to use, any industrial, commercial or scientific equipment. 4. The term fees for technical services means
payments of any kind in consideration for the rendering of 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. 5. The provisions of paragraphs 1 and 2 shall not
apply if the beneficial owner of the royalties and 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
Contracting 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. 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 Contracting
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 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 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 or between both of them and some other person, 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 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
Contracting 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 a fixed base, may
be taxed in that other Contracting 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 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 also be taxed in that Contracting 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 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. Notwithstanding the provisions of Article 12
relating to fees for technical services, 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 Contracting State except in the
following circumstances: (a) if he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities; 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
fiscal year; in such case,
only so much of the income as is attributable to that fixed base or as is
derived from his activities performed in that other Contracting State, as the
case may be, may also be taxed in that other Contracting State. 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
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 relevant fiscal year; 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 shall be taxable only 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 Contracting State. Article 17 : Income
earned by artistes and sportspersons - 1. Notwithstanding the
provisions of Articles 14 and 15, income derived by a resident of a Contracting
State as an artiste, 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 artiste or a sportsperson in his capacity as such
accrues not to the artiste or sportsperson 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 artists 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 wholly or substantially
supported by public funds of one or both of the Contracting States or of
political sub-divisions or local authorities thereof. In such a case, the
income is taxable only the Contracting State of which the entertainer or
sportsperson is a resident. Article 18 : 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 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
person 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 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 may be taxed
only in the first-mentioned Contracting State. 2. The term pension means a periodic payment
made in consideration of past 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 moneys worth. Article 20 : Payments received by 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 the 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 in an amount not
exceeding the equivalent of US dollars 2000, during any fiscal year, 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 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 seven consecutive
years from the date of his first arrival in that other Contracting State. Article 21 : Payments
received by professors, teachers and research scholars - 1. A
professor or teacher or 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, school or other institution, approved 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
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 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. 4. For the purposes of paragraph 1, approved
means a university, college, school or other institution which has been
approved in this regard by the competent authority of the concerned Contracting
State. Article 22 : Other
income - 1. Subject to the provisions of paragraph 2, items of
income of a resident of a Contracting State, wherever arising, which are not
expressly dealt with in the foregoing articles of this Convention, 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 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 the other Contracting State. Article 23 : Avoidance of double taxation - 1.
The laws in force in either of the Contracting State 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. 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 Convention, may be taxed in Morocco, India shall allow as a deduction from
the tax on the income of that resident an amount equal to the income-tax paid
in Morocco whether directly or by deduction at source. Such amount 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 Morocco. 3. In the case of Morocco, double taxation shall
be eliminated as follows: Where a
resident of Morocco derives income which, in accordance with the provisions of
this Convention, may be taxed in India, Morocco shall allow as a deduction from
the tax on the income of that resident an amount equal to the income-tax paid
in India, whether directly or by deduction at source. 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 India. 4. The tax payable in a 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 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. 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 in
the same circumstances. 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 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 Convention. 3. Nothing contained in this Article shall be
construed as obliging a Contracting State to grant to persons not residents 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 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 convention. 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 three 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 the
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 this Convention. They
may also consult together for the elimination of double taxation in cases not
provided for in this 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 States concerning taxes covered by this 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. 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
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. 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. The exchange of information or documents
shall be either on routine basis or on request with reference to particular
cases 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) 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 : Collection assistance - 1.
The Contracting States undertake to lend assistance to each other in the
collection of taxes to which Convention relates, together with interest, costs,
and civil penalties relating to such taxes referred to in this Article as a
revenue claim. 2. Request for assistance by the competent
authority of Contracting State in the collection of a revenue claim shall
include a certification by such authority that under the laws of that State the
revenue claim has been finally determined. For the purposes of this Article, a
revenue claim is finally determined when a Contracting State has the right
under its internal law to collect the revenue claim and the taxpayer has no
further rights to restrain collection. 3. Amount collected by the competent authority
of a Contracting State pursuant to this Article shall be forwarded to the competent
authority of the other Contracting State. However, the first-mentioned
Contracting State shall be entitled to reimbursement of costs, if any,
incurred in the course of rendering such assistance to the extent mutually
agreed between the competent authorities of the two States. 4. Nothing in this Article shall be construed as
imposing on either Contracting State the obligation to carry out administrative
measures of a different nature from those used in the collection of its own
taxes or those which would be contrary to its public policy. Article 28 : Diplomatic and Consular Activities -
Nothing in this Convention shall affect the fiscal privileges of diplomatic and
consular officials under the general rules of international law or under the
provisions of special agreements. Article 29 : 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 Convention. 2. This Convention shall enter into force 30 days
after the receipt of the later of the notifications referred to in paragraph 1
of this Article. 3. The provisions of this Convention 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 Convention enters into force; and (b) in Morocco, in respect of income arising on or after the first day
of January of the calendar year next following the year in which this
Convention enters into force. Article 30 : Termination
- This Convention shall remain in force indefinitely, until terminated by
a Contracting State. Either Contracting State may terminate the Convention
through diplomatic channels by giving notice of termination at least six months
before the end of any calendar year beginning after the expiration of five
years from the date of entry into force of the Convention. In such event, the
Convention shall cease to have effect: (a) in India, in respect of income arising in any fiscal year on or
after the first day of April next following the calendar year in which the
notice of termination is given; (b) in Morocco, in respect of income arising on or after the first day
of January of the calendar year next following the year in which the notice of
termination is given. In witness whereof the
undersigned, being duly authorised thereto, have signed the present
Convention. Done in
duplicate at Rabat, this 30th day of October, 1998 in the Hindi, Arabic,
English and French languages, the four texts being equally authentic. In case
of divergence of interpretation, the English text shall prevail.
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