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Netherlands 1610. Agreement for avoidance
of double taxation and prevention of fiscal evasion with Netherlands Whereas the
annexed convention between the Government of the Republic of India and the
Kingdom of the Netherlands for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and on capital has
come into force on the 21st day of January, 1989, 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 Convention; in
accordance with paragraph 1 of the Article 29 of the said Convention; Now,
therefore, in exercise of the powers conferred by section 90 of the Income-tax
Act, 1961 (43 of 1961), section 24A of the Companies (Profits) Surtax Act, 1964
(7 of 1964) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), the
Central Government hereby directs that all the provisions of the said
Convention shall be given effect to in Union of India. Notification : No. GSR 382(E), dated 27-3-1989 as amended
by Notification No. SO 693(E), dated 30-8-1999. Annexure Convention between the republic of India and
the Kingdom of The Government
of the Republic of India and the Government of the Kingdom of Netherlands. Desiring to
conclude a convention for the avoidance of double taxation and the prevention
of fiscal evasion with respect to taxes on income and on capital : 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 the States. Article 2 - Taxes
covered - 1. This Convention shall apply to taxes on income and on
capital imposed on behalf of one of the States 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 on capital all taxes imposed on total income, on total capital, or on
elements of income or of capital, including taxes on gains from the alienation
of movable or immovable property, taxes on the total amounts of wages or
salaries paid by enterprises, as well as taxes on capital appreciation. 3. The existing taxes to which the Convention
shall apply are in particular : (a) in the Netherlands : - de inkomstenbelasting (income-tax), - de loonbelasting (wages tax), - de vennootschapsbelasting (company tax) including the
Government share in the net profits of
the exploitation of natural resources levied pursuant to the Mining Act of 1810
(Mijnwet 1810) with respect to concessions issued from 1967, or pursuant to the
Netherlands Continental Shelf Mining Act of 1965 (Mijnwet Continental Plat,
1965), - de dividenbelasting (dividend tax), - de vermogensbelasting (capital tax), (hereinafter referred to as
Netherlands tax). (b) in India : - the income-tax including any surcharge thereon, - the surtax, - the wealth-tax, (hereinafter referred to as
Indian 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.
The competent authorities of the States shall notify to each other any
substantial changes which have been made in their respective taxation laws. Chapter II - Definitions Article 3 - General
definitions - 1. For the purposes of this Convention, unless the
context otherwise requires : (a) the term State means the Netherlands or India, as the context
requires, the term States means the Netherlands and India ; (b) the term the Netherlands means the part of the Kingdom of the
Netherlands that is situated in Europe and the part of the sea-bed and the
sub-soil under the North Sea, to the extent that that area, in accordance with
international law has been or may hereafter be designated under Netherlands
laws as an area within which the Netherlands may exercise certain rights with respect to the exploration
and exploitation of the natural resources of the sea-bed or its sub-soil ; (c) 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 jurisdiction, according
to the Indian law and in accordance with international law ; (d) the term tax means Indian tax or Netherlands 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 includes an individual, a company, any other body
of persons and any other entity which is treated as a taxable unit, under the
taxation laws in force in the respective States ; (f) 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 States ; (g) the terms enterprise of one of the States and enterprise of the
other State mean respectively an enterprise carried on by a resident of one of
the States an enterprise carried on by a resident of the other States ; (h) the term international traffic means any transport by a ship or
aircraft operated by an enterprise which has its place of effective management
in one of the States, except when the ship or aircraft is operated solely
between places in the other States ; (i) the term nationals means : 1. all individuals possessing the nationality of one of the States ; 2. all legal persons, partnerships and associations deriving their
status as such from the laws in force in one of the States ; (j) the term competent authority means : 1. in the Netherlands, the Minister of Finance or his authorised
representative ; 2. in India the Central Government in the Ministry of Finance
(Department of Revenue) or their authorised representatives. 2. As regards the application of the Convention
by one of the States any term not defined herein 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 one of
the States 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 States, then his status shall
be determined as follows : (a) he shall be deemed to be 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 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 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 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 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 ; (i) an installation or structure used for the exploration of natural
resources provided that the activities continue for more than 183 days. 3. A building site or construction, installation
or assembly project constitutes a permanent establishment only where such site
or project continues for a period of more than six months. 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 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 of 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 fixed place of business solely for the purpose of purchasing goods or
merchandise, or of collecting information, for the enterprise ; (e) the maintenance of fixed place of business solely for the purpose
of advertising, for the supply of information, for scientific research, or for
other activities which had preparatory or auxiliary character, for the
enterprise ; (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. 5. Notwithstanding the provisions of paragraphs
1 and 2, where a person - other than an agent of an independent status to whom
paragraph 6 applies - is acting in one
of the States, on behalf of an enterprise of the other 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 ; or (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 ; 6. An enterprise of one of the States shall not
be deemed to have a permanent establishment in the other State merely because
it carries on business in that other
State through a broker, a 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 if it is shown that the transaction between the agent and the
enterprise were not made under arms length conditions. 7. The fact that a company which is a resident
of one of the States controls or is controlled by a company which is a resident
of the other 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 or the other. Chapter III - Taxation of income ARTICLE 6 - Income
from immovable property - 1.
Income derived by a resident of one of the States from immovable property
(including income from agriculture or forestry) situated in the other 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 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 one of the States shall
be taxable only in that State unless the enterprise carries on business in the
other 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 one of the States carries on business in the other State
through a permanent establishment situated therein, there shall in each 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 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 the basis of an apportionment of
the total profits of the enterprise to its various parts, provided, however,
that the result shall be in accordance with the principles contained in this
Article. 3. (a) 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. 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 between that State and a third State
which enters into force after the date of entry into force of this Convention,
the competent authority of that State shall notify the competent authority of
the other State of the terms of the corresponding paragraph in the Convention
with that third State immediately after the entry into force of that Convention
and, if the competent authority of the other State or 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, 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 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. 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 - Air
transport - 1. Profits from the operation of aircraft in
international traffic shall be taxable only in the State in which the place of
effective management of the enterprise is situated. 2. For the purposes of this Article: (a) profits from the operation in international traffic of aircraft
include profits derived from the rental on a bareboat basis of aircraft if operated
in international traffic if such rental profits are incidental to the profits
described in paragraph 1; (b) interest on funds connected with the operation of aircraft in
international traffic shall be regarded as profits derived from the operation of
such aircraft and the provisions of Article 11 shall not apply in relation to
such interest. 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. ARTICLE 8A - Shipping - 1. Profits from
the operation of ships in international traffic shall be taxable only in the
State in which the place of effective management of the enterprise is situated. 2. However, if the operation of a ship in the
other State is more than casual, such profits may also be taxed in that other
State and according to the laws of that State, but only so much of them as is
derived from that other State and provided that the profits are in respect of
any one or more of the first ten fiscal years for which the Convention has
effect. For the
purposes of this paragraph : (a) profits derived from the other State means profits from the
carriage of passengers or freight embarked in that other State ; (b) the amount of such profits shall not exceed 5 per cent of the sums
receivable in respect of such carriage ; (c) the rate of tax chargeable on such profits shall be 50 per cent of
the rate of tax on those profits which would have been chargeable in the
absence of this Convention. 3. If the place of effective management of a
shipping enterprise is aboard a ship, then it shall be deemed to be situated in
the State in which the home harbour of the ship is situated, or, if there is no
such home harbour, in the State of which the operator of the ships is a
resident. 4. For the purposes of this Article : (a) interest on funds connected with the operation of ships in
international traffic shall be regarded as profits from the operation of such
ships and the provisions of Article 11 shall not apply in relation to such
interest; and (b) profits from the operation of ships include: (i) 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
; (ii) profits from the rental on a full or bareboat basis of ships if
operated in international traffic : Provided that such profits are incidental to the
profits described in paragraph 1. 5. The provisions of this Article shall also
apply to profits from participation in a pool, a joint business or an
international operating agency. ARTICLE 9 - Associated enterprises - 1.
Where (a) an enterprise of one of the States participates directly or indirectly
in the management, control or capital of an enterprise of the other State, or (b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of one of the States and an
enterprise of the other 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 one of the State includes in the
profits of an enterprise of that State - and taxes accordingly - profits on
which an enterprise of the other 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 States shall if necessary consult each
other. ARTICLE 10 - Dividends - 1. Dividends paid
by a company which is a resident of one of the States to a resident of the
other 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. 3. The competent authorities of the States shall
by mutual agreement settle the mode of application of paragraph 2. 4. The provisions of paragraph 2 shall not
affect the taxation of the company in respect of the profits out of which the
dividends are paid. 5. The term dividend as used in this Article
means income from shares, jouissance shares or jouissance rights, mining
shares, founders shares or other rights participating in profits, as well as
income from debt-claims participating in profits and 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. 6. The provisions of paragraphs 1 and 2 shall
not apply if the beneficial owner of the dividends, being a resident of one of
the States, carries on business in the other 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. 7. Where a company which is a resident of one of
the States derives profits or income from the other 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
companys undistributed profits to a tax on the companys 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 one of the States and paid to a resident of the other State may be
taxed in that other State. 1[2. However, such interest may also be
taxed in the Contracting State in which it arises and according to 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 gross amount of the interest.] 3. Notwithstanding the provisions of paragraph 2
: (a) the Government of one of the States shall be exempt from tax in the
other State in respect of interest derived directly or indirectly by that
Government from that other State ; (b) interest arising in one of the States and paid in respect of a loan
guaranteed or insured by the Government of the other State shall be exempted
from tax in the first-mentioned State. 4. For the purposes of paragraph 3, the term
Government means : (a) in the case of the Netherlands, the Government of the Kingdom of
the Netherlands and shall include : - the local authorities ; - the Netherlands Bank (Central Bank) ; - such institutions, the capital of which is wholly owned by the
Government of the Kingdom of the Netherlands or the local authorities ; - the Netherlands Financierings Maatshappji voor Ontwikkelings
landen N.V. (Netherlands finance company for developing countries) and the
Netherlands Investerings bank voor Ontwikkelings landen N.V. (Netherlands investment
Bank for developing countries) ; - all other institutions as may be agreed from time to time between
the competent authorities of the States ; (b) in the case of India, the Government of India and shall include : - a political sub-division ; - a local authority ; - the Reserve Bank of India (Central Bank) ; - the Export-Import Bank of India ; - such institutions, the capital of which is wholly owned by the
Government of India or a political sub-division or a local authority; - all other institutions as may be agreed from time to time between
the competent authorities of the States. 5. The competent authorities of the States shall
by mutual agreement settle the mode of application of paragraph 2. 6. The term interest as used in this Article
means income from debt-claims of every kind, whether or not secured by
mortgage, but not carrying a right to participate in the debtors profits, and
in particular, income from the 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. 7. The provisions of paragraphs 1, 2 and 3 shall
not apply if the beneficial owner of the interest, being a resident of one of
the States, carries on business in the other 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. 8. Interest shall be deemed to arise in one of
the States 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 one of the States or not, has in one
of the States 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. 9. 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 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 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 the fees for technical services. 3. The competent authorities of the States shall
by mutual agreement settle the mode of application of paragraph 2. 4. 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, any
patent, trade mark, design or model, plan, secret formula or process, or for
information concerning industrial, commercial or scientific experience. 5. For purposes of this Article, fees for
technical services means payments of any kind to any person in consideration
for the rendering of any technical or consultancy services (including through
the provision of services of technical or other personnel) if such services : (a) are ancillary and subsidiary to the application or enjoyment of the
right, property or information for which a payment described in paragraph 4 of
this Article is received; or (b) make available technical knowledge, experience, skill, know-how or
processes, or consist of the development and transfer of a technical plan or
technical design. 6. Notwithstanding paragraph 5, fees for technical services does not
include amounts paid : (a) for services that are ancillary and subsidiary, as well as
inextricably and essentially linked, to the sale of property; (b) for services that are ancillary and subsidiary to the rental of
ships, aircraft, containers or other equipment used in connection with the
operation of ships or aircraft in international traffic; (c) for teaching in or by educational institutions; (d) for services for the personal use of the individual or individuals,
making the payment; or (e) to an employee of the person making the payments or to any individual
or partnership for professional services as defined in Article 14 (Independent
Personal Services) of this Convention. 7. 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 one
of the States, carries on business in the other 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 royalties or fees for technical
services are 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. 8. Royalties or fees for technical services shall be deemed to arise in
one of the States 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 one of the States or not, has in one of the States a permanent
establishment or a fixed base in connection with which the contract under which
the royalties or fees for technical services are paid was concluded, 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. 9. 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 royalties fees
for 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 payment shall
remain taxable, according to the laws of each State, due regard being had to
the other provisions of this Convention. ARTICLE 13 - Capital gains - 1. Gains
derived by a resident of one of the States from the alienation of immovable property
referred to in Article 6 and situated in the other 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 one of the States has in the other State or of movable property
pertaining to a fixed base available to a resident of one of the States in the
other State for the purpose of performing independent personal services,
including such gains from the alienation of such 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 movable property pertaining to
the operation of such ships or
aircraft, shall be taxable only in the State in which the place of effective
management of the enterprise is situated. For the purposes of this paragraph,
the provisions of paragraph 3 of Article 8A shall apply. 4. Gains derived by a resident of one of the
States from the alienation of shares (other than shares quoted on an approved
stock exchange) forming part of a substantial interest in the capital stock of
a company which is a resident of the other State, the value of which shares is
derived principally from immovable property situated in that other State other
than property in which the business of the company was carried on, may be taxed
in that other State. A substantial interest exists when the resident owns 25
per cent or more of the shares of the capital stock of a company. 5. Gains from the alienation of any property
other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only
in the State of which the alienator is a resident. However, gains
from the alienation of shares issued by a company resident in the other State
which shares form part of at least a 10 per cent interest in the capital stock
of that company, may be taxed in that other State if the alienation takes place
to a resident of that other State. However, such gains shall remain taxable
only in the State of which the alienator is a resident if such gains are
realised in the course of a corporate organisation, reorganization,
amalgamation, division or similar transaction, and the buyer or the seller
owns at least 10 per cent of the capital of the other. 6. The provisions of paragraph 3 shall not
affect the right of each of the States to levy according to its own law at tax
on gains from the alienation of shares or jouissance rights in a company, the
capital of which is wholly or partly divided into shares and which under the
laws of that State is a resident of that State, derived by an individual who is
a resident of the other State and has been a resident of the first-mentioned
State in the course of the last five years preceding the alienation of the
shares or jouissance rights. ARTICLE 14 - Independent personal services - 1.
Income derived by a resident of one of the States 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 State: (a) if he has a fixed base regularly available to him in the other
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 amounting
to or exceeding in the aggregate 183 days 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, literary, artistic, educational or teaching
activities as well as the independent activities of physicians, lawyers,
engineers, architects, dentists and accountants. 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 one of the States in
respect of an employment shall be taxable only in that State unless the
employment is exercised in the other 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 one of the States in respect of an
employment exercised in the other 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 by a resident of one of the States in respect
of an employment exercised aboard a ship or aircraft operated in international
traffic, shall be taxable only in that State. ARTICLE 16 - Directors fees - Directors fees or
other remuneration derived by a resident of one of the States in his capacity
as a member of the board of directors, a bestuurder or a commissaris of a company which is a
resident of the other 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 one of the States 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 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 State in which the activities of the entertainer or athlete are
exercised. 3. Notwithstanding the provisions of paragraphs
1 and 2, income derived by an entertainer or an athlete who is a resident of
one of the States from his personal activities as such exercised in the other
State, shall be taxable only in the first-mentioned State, if the activities in
the other State are supported wholly or substantially from the public funds of
the first-mentioned State including any of its political sub-divisions or local
authorities, and such activities are exercised under the terms of a bilateral
cultural agreement between the two States. 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 one of the States in consideration
of past employment as well as any annuity paid to such a resident, shall be
taxable only in that State. 2. However, where such remuneration is not of a
periodical nature and it is paid in consideration of past employment in the
other State, it may be taxed in that other State. 3. Any pension paid out under the provisions of
a social security system of one of the States to a resident of the other State
may be taxed in the first-mentioned State. 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 moneys worth. ARTICLE 19 - Government service - 1. (a)
Remuneration, other than a pension, paid by one of the States 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 may be taxed in
that State. (b)
However, such remuneration shall be taxable only in the other State if the
services are rendered in that State and the individual is a resident of that
State who : 1. is a national of that State; or 2. 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, one of the States or a political sub-division or a local
authority thereof to an individual in respect of services rendered to that
State of sub-division or authority may be taxed in that State. (b)
However, such pension shall be taxable only in the other 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 one of the States or a political
sub-division or a local authority thereof. Article 20 - Professors,
teachers and research scholars - 1. A professor or teacher who is or was a
resident of one of the States immediately before visiting the other State for
the purpose of teaching or engaging in research, or both, at a university,
college, school or other approved institution in that other State shall be
taxable only in the first-mentioned 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 paragraph 1, approved
institution means an institution which has been approved in this regard by the
competent authority of the State concerned. Article 21 - Students
and apprentices - 1. Student or business apprentice who is or was a resident
of one of the State immediately before visiting the other 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, in an amount not
exceeding 5000 guilders or its equivalent in Indian currency 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 undertaking, 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 State. Chapter IV - Taxation On Capital Article 22 - Capital
- 1. Capital represented by immovable property referred to in Article 6,
owned by a resident of one of the States and situated in the other State, may
be taxed in that other State. 2. Capital represented by movable property
forming part of the business property of a permanent establishment which an
enterprise of one of the States has in the other State or by movable property
pertaining to a fixed base available to a resident of one of the States in the
other State for the purpose of performing independent personal services, may
be taxed in that other State. 3. Capital represented by ships and aircraft
operated in international traffic and movable property pertaining to the
operation of such ships and aircraft shall be taxable only in State in which
the place of effective management of the enterprise is situated. For the
purposes of this paragraph, the provisions of paragraph 3 of Article 8A shall
apply. 4. All other elements of capital of a resident
of one of the States shall be taxable only in that State. Chapter V - Elimination of Double Taxation Article 23 - Elimination
of double taxation - 1. The Netherlands, when imposing tax on its
residents, may include in the basis upon which such taxes are imposed the items
of income or capital which, according to the provisions of this Convention, may
be taxed in India. 2. However, where a resident of the Netherlands
derives items of income or owns items of capital which, according to Article 6,
Article 7, paragraph 6 of Article 10, paragraph 7 of Article 11, paragraph 7 of
Article 12, paragraphs 1, 2, 4 and 5 of Article 13, Article 14, paragraph 1 of
Article 15, Article 16, paragraph 3 of Article 18, Article 19 and paragraphs 1
and 2 of Article 22 of this Convention may be taxed in India and are included
in the basis referred to in paragraph 1, the Netherlands shall exempt such
items of income or capital by allowing a reduction in its tax. These reductions
shall be computed in conformity with the provisions of Netherlands law for the
avoidance of double taxation. For that purpose the said items of income or
capital shall be deemed to be included in the total amount of items of income
or capital which are exempted from Netherlands tax under those provisions. 3. Further, the Netherlands shall allow a
deduction from the Netherlands tax so computed for items of income which,
according to paragraph 2 of Article 8A, paragraph 2 of Article 10, paragraph 2
of Article 11, paragraph 2 of Article 12, Article 17 and paragraph 2 of Article
18 of this Convention may be taxed in India to the extent that these items are
included in the basis referred to in paragraph 1. The amount of this deduction
shall be equal to the tax paid in India on these items of income, but shall not
exceed the amount of the reduction which would be allowed if the items of
income so included were the sole items of income which are exempted from
Netherlands tax under the provisions of Netherlands tax for the avoidance of
double taxation. Where, by
reason of special relief given under the provisions of Indian law for the
purpose of encouraging investment in India, the Indian tax actually levied on
interest arising in India is lower than the tax India may levy according to
sub-paragraphs (a) and (b) of paragraph 2 of Article 11, then the
amount of the tax paid in India on such interest shall be deemed to have been
paid at the rates of tax mentioned in the said provisions. However, if the
general tax rates under the Indian law applicable to the aforementioned
interest are reduced below those mentioned in the foregoing sentence, these
lower rates shall apply for the purposes of that sentence. The provisions of
the two foregoing sentences shall apply only for a period of ten years after
the date on which the Convention became effective. This period may be extended
by mutual agreement between the competent authorities. 4. In 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 Convention, may be taxed in the Netherlands, 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 Netherlands, whether directly or by deduction;
and as a deduction from the tax on the capital of that resident, an amount equal
to the capital tax paid in the Netherlands. 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 Netherlands.
Further, where such resident is a company by which surtax is payable in India,
the deduction in respect of income-tax paid in the Netherlands 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: Provided that income which in accordance with the
provisions of this Convention is not to be subjected to tax may be taken into
account in calculating the rate of tax to be imposed. For the
purposes of this paragraph in determining the taxes on income paid to the
Netherlands, the investment premiums and bonuses and disinvestment payments as
meant in the Netherlands Investment Account Law (Wet investeringsrekening)
shall not be taken into account. For the purposes of this paragraph, the taxes
referred to in paragraphs 3(a) and 4 of Article 2, other than the
capital tax, shall be considered as taxes on income. 5. Where a resident of one of the States derives
gains which may be taxed in the other State in accordance with paragraph 6 of
Article 13, that other State shall allow a deduction from its tax on such gains
to an amount equal to the tax levied in the first-mentioned State on the said
gains. Chapter VI - Special Provisions Article 24 - Non-discrimination
- 1. Nationals of one of the States shall not be subjected in the other
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. These
provisions shall, notwithstanding the provisions of Article 1, also apply to
persons who are not residents of one or both of the States. 2. Except where the provisions of paragraph 3 of
Article 7 apply, the taxation on a permanent establishment which an enterprise
of one of the States has in the other 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. The provisions of paragraph 2 shall not be
construed as obliging one of the States to grant to residents of the other
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. 4. Except where the provisions of paragraph 1 of
Article 9, paragraph 9 of Article 11, or paragraph 9 of Article 12 apply, interest,
royalties and other disbursements paid by an enterprise of one of the States to
a resident of the other 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. Similarly, any debts
of an enterprise of one of the States to a resident of the other State shall,
for the purpose of determining the taxable capital of such enterprise, be
deductible under the same conditions as if they had been contracted to a
resident of the first-mentioned State. 5. Enterprises of one of the States, the capital
of which is wholly or partly owned or controlled, directly or indirectly, by
one or more residents of the other 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 are or may be subjected. Article 25 - Mutual
agreement procedure - 1. Where a person considers that the actions of one
or both of the 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 law of those States, present his case to the
competent authority of the State of which he is a resident or, if his case
comes under paragraph 1 of Article 24, to that of the 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 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
States. 3. The competent authorities of the 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 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 two States. Article 26 - Exchange of information - 1. The competent authorities of the
States shall exchange such information as is necessary for carrying out the
provisions of the Convention or of the domestic laws of the States 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. Any information received by one of the States 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 courts or bodies) involved in
the assessment or collection of, the enforcement 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. 2. In no case shall the provisions of paragraph 1 be construed so as to
impose on one of the States the obligation: (a) to carry out administrative measures at
variance with the laws and administrative practices of that or of the other
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 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 (ordre public). Article 27 - Diplomatic agents and consular officers - 1. 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. 2. For the purposes of the Convention an
individual who is a member of a diplomatic or consular mission of one of the
States in the other State or in a third State and who is a national of the
sending State, shall be deemed to be a resident of the sending State if he is
subjected therein to the same obligations in respect of taxes on income or on
capital as are residents of that State. 3. International organisations, organs and
officials thereof and members of a diplomatic or consular mission of a third
State, being present in one of the States, are not entitled, in the other
State, to the reductions or exemptions from tax provided for in Articles 10, 11
and 12 in respect of the items of income dealt with in these Articles and
arising in that other State, if such items of income are not subject to a tax
on income in the first-mentioned State. Article 28 - Territorial extension - 1. This Convention may be extended
either in its entirety or with any necessary modifications, to either or both
of the countries of Aruba or the Netherlands Antilles, if the country
concerned imposes taxes substantially similar in character to those to which
the Convention applies. Any such extension shall take effect from such date and
subject to such modifications and conditions including conditions as to
termination, as may be specified and agreed in notes to be exchanged through
diplomatic channels. 2. Unless otherwise agreed, the termination of the Convention shall not
also terminate any extension of the Convention to any country to which it has
been extended under this Article. Chapter VII - Final Provisions Article 29 - Entry into force - 1. Each of the States shall notify to the
other the completion of the procedures required by its law for the bringing
into force of this Convention. This Convention shall enter into force on the
thirtieth day after the latter of the dates on which the respective Governments
have notified each other in writing that the formalities constitutionally
required in their respective States have been complied with, and its provisions
shall have effect: (a) in the Netherlands for taxable years and
periods beginning on or after the first day of January next following the
calendar year in which the latter of the notifications 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 latter of the notifications is given. 2. Notwithstanding the provisions of paragraph 1, the provisions of
Article 8 shall have effect: (a) in the Netherlands for taxable years and
periods beginning on or after the first day of January, 1987 ; (b) in India in respect of income arising in any
fiscal year beginning on or after the first day of April, 1987. Article 30 - Termination - This Convention shall remain in force until
terminated by one of the Contracting Parties. Either party may terminate the
Convention, 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. In such event, the
Convention shall cease to have effect : (a) in the Netherlands for taxable years and
periods beginning on or after the first day of January next following the
calendar year in which the notice of termination has been given ; (b) in India in respect of income arising in any
fiscal year beginning on or after the 1st day of April next following the
calendar year in which the notice of termination has been given. In witness whereof the undersigned, duly authorised thereto,
have signed this Convention. Done at New Delhi this thirtieth day of July, 1988, in duplicate, in the
Hindi, Netherlands and English languages, the three texts being equally
authentic. In case of divergence between the Hindi and Netherlands texts, the
English text shall be the operative one. Protocol At the moment of signing the Convention for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income
and on capital, this day concluded between the Kingdom of the Netherlands and
the Republic of India, the undersigned have agreed that the following
provisions shall form an integral part of the Convention. I. Ad Article 7 1. In respect of paragraphs 1 and 2 of Article 7, where an enterprise of
one of the States sells goods or merchandise or carries on business in the
other State through a permanent establishment situated therein, the profits of
that permanent establishment shall not be determined on the basis of the total
amount received by the enterprise, but shall be determined only on the basis of
the remuneration which is attributable to the actual activity of the permanent
establishment for such sales or business. Especially, in the case of contracts
for the survey, supply, installation or construction of industrial, commercial
or scientific equipment or premises, or of public works, when the enterprise
has a permanent establishment, the profits of such permanent establishment
shall not be determined on the basis of the total amount of the contract, but
shall be determined only on the basis of that part of the contract which is
effectively carried out by the permanent establishment in the State where the
permanent establishment is situated. The profits related to that part of the
contract which is carried out by the head office of the enterprise shall be
taxable only in the State of which the enterprise is a resident. 2. It is understood that with respect to paragraph 2 of Article 7, no
profits shall be attributed to a permanent establishment by reason of the
facilitation of the conclusion of foreign trade or loan agreements or mere
signing thereof. 3. Where the law of the State in which a permanent establishment is
situated imposes in accordance with the provisions of sub-paragraph (a)
of paragraph 3 of Article 7 a restriction on the amount of the executive and
general administrative expenses which may be allowed as a deduction in
determining the profits of such permanent establishment, it is understood that
in determining the profits of such permanent establishment the deduction in respect
of such executive and general administrative expenses in no case shall be less
than what is allowable under the Indian Income-tax Act as on the date of
signature of this Convention. II. Ad Article 8A It is understood that in case the percentage as is specified in section
44B of the Indian Income-tax Act as on the date of signature of this
Convention for the purpose of determining the amount of shipping profits is
reduced by any change in the Indian law, the percentage as is mentioned in
sub-paragraph (b) of paragraph 2 of Article 8A will be reduced in the
same proportion. III. Ad Article 9 It is understood that the fact that associated enterprises have
concluded arrangements, such as cost-sharing arrangements or general services
agreements, for or based on the allocation of executive, general
administrative, technical and commercial expenses, research and development
expenses and other similar expenses, is not in itself a condition as meant in
paragraph 1 of Article 9. IV. Ad Articles 10, 11 and 12 1. Where tax has been levied at source in excess of the amount of tax
chargeable under the provisions of Article 10, 11 or 12, applications for the
refund of the excess amount of tax have to be lodged with the competent
authority of the State having levied the tax, within a period of three years
after the expiration of the calendar year in which the tax has been levied. 2. If after the signature of this
convention under any Convention or Agreement between India and a third State
which is a member of the OECD India should limit its taxation at source on
dividends, interests, royalties, fees for technical services or payments for
the use of equipment to a rate lower or a scope more restricted than the rate
or scope provided for in this Convention on the said items of income, then as
from the date on which the relevant Indian Convention or Agreement enters into
force the same rate or scope as provided for in that Convention or Agreement on
the said items of income shall also apply under this Convention. V. Ad Article 12 It is understood that in case India applies a levy, not being a levy
covered by Article 2, such as the Research and Development Cess, on payments
meant in Article 12, and if after the signature of this Convention under any
Convention or Agreement between India and a third State which is a member of
the OECD India should give relief from such levy, directly, by reducing the
rate or the scope of the levy, either in full or in part, or, indirectly, by
reducing the rate of the scope of the Indian tax allowed under the Convention
or Agreement in question on payments as meant in article 12 of this Convention
with the levy, either in full or in part, then, as from the date on which the
relevant Indian Convention or Agreement enters into force, such relief as
provided for in that Convention or agreement shall also apply under this
Convention. VI. Ad Article 16 It is understood that bestuurder or commissaris of a Netherlands
company means persons, who are nominated as such by the general meeting of shareholders
or by any other competent body of such company and are charged with the general
management of the company and the supervision thereof, respectively. VII. Ad Article 23 It is understood that for the computation of the reduction mentioned in
paragraph 2 of Article 23, the items of capital referred to in paragraph 1 of
Article 22 shall be taken into account for the value thereof reduced by the
value of the debts secured by mortgage on the capital and the items of capital
referred to in paragraph 2 of Article 22 shall be taken into account for the
value thereof reduced by the value of the debts pertaining to the permanent
establishment or fixed base. In witness whereof the undersigned, duly authorised thereto,
have signed this Protocol. Done at New Delhi this
thirtieth day of July, 1988, in duplicate, in the Hindi, Netherlands and
English languages, the three texts being equally authentic. In case of
divergence between the Netherlands and Hindi texts, the English text shall be
the operative one. Judicial
Analysis
n Where duration of
assessees activities under
sub-contract did not exceed period of six months, no permanent establishment
could be said to have come into existence so as to make assessees business
income taxable in IndiaBKI/HAM VOF. C/o Arthur Anderson & Co. v. Addl.
CIT [2001] 70 TTJ (Delhi - Trib.) 480. n Where applicants had
completed their contract work in India in a period of less than 183 days, they
could not be said to have a permanent establishment in India though a fully
equipped diving support vessel brought within Indian territorial waters and
functioning within defined area to enable applicants to carry on their business
within that territory could be considered fixed place of business in the territory
and permanent establishment in India within meaning of article 7 of DTAAAdvance
Rulings Petition No. 24 of 1996, In re [1999] 104 Taxman 377/237 ITR 798
(AAR - N. Delhi). n Where the
assessee-companies were incorporated in United Kingdom and the country in
which their effective management was situated was also United Kingdom and the
assessee-companies transferred their shareholdings in Indian companies to a
newly formed company in Netherlands in consideration of shares of the new
company, capital gains arising to assessee-companies would be taxable in India
and could not be treated as exempt under Indo-UK DTAA or Indo-Dutch DTAADy.
CIT v. General Electric Co. Plc. [2001] 71 TTJ 973/119 Taxman 13
(Cal. - Trib.).
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