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POLAND 38. Agreement for avoidance of double taxation
and prevention of fiscal evasion with Poland Whereas
the annexed Agreement between the Government of the Republic of India and the
Government of the Polish Peoples Republic for the avoidance of double taxation
and the prevention of fiscal evasion with respect to taxes on income has come
into force on the 26th October, 1989, after the notification by both the
Contracting States and communication to each other of the completion of
procedures required under their laws for bringing into force of the said
Agreement in accordance with article 30 of the said Agreement ; Now, therefore,
in exercise of the powers conferred by section 90 of the Income-tax Act, 1961
(43 of 1961) and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of
1964), the Central Government hereby
directs that all the provisions of the said Agreement shall be given effect to
in the Union of India. Notification : No. GSR 72(E), dated 12-2-1990. Annexure Agreement between the Republic of India and the
Government of The
Government of the Republic of India and the Government of the Polish Peoples
Republic desiring to further develop and facilitate the economic relationship
between the two countries, and having decided to conclude an Agreement for the
avoidance of double taxation and the prevention of fiscal evasion with respect
to taxes on income. Have
agreed as follows : ARTICLE
1 - Personal scope - This agreement shall apply to persons who are
residents of one or both of the Contracting States. ARTICLE
2 - Taxes covered - 1. The taxes to which this Agreement
shall apply are : (a) in India : (i) the income-tax including any surcharge
thereon imposed under the Income-tax Act, 1961 ; (ii) the surtax imposed under the Companies
(Profits) Surtax Act, 1964 ; (hereinafter
referred to as Indian tax) (b) in Poland : (i) the income-tax (podatek dechodowy) ; (ii) the tax on wages and salaries (podatek od
wynagrodzen) ; (iii) the equalisation tax (podatek wyrdwanawczy) ;
and (iv) the agriculture tax (podatek rolny). (hereinafter
referred to as Polish tax). 2. The
Agreement shall also apply to any identical or substantially similar taxes
which are imposed by either Contracting State after the date of signature of
the present Agreement in addition to, or in place of, the taxes referred to in
paragraph 1. The competent authorities of the Contracting States shall notify
each other of any substantial changes which are made in their respective
taxation laws, which are the subject of this Agreement. ARTICLE
3 - General definitions - 1.
In this Agreement, unless the context otherwise requires : (a) the term India means the Republic of India
and, when used in a geographical sense means the territory of the Republic of
India and any maritime area adjacent to the territorial waters of the Republic
of India within which, under the laws of India and in accordance with
international law, the Republic of India has sovereignty or sovereign and
exclusive rights ; (b) the term Poland means the Polish Peoples
Republic and when used in a geographical sense means the territory of the
Polish Peoples Republic and any maritime area adjacent to the territorial
waters of the Polish Peoples Republic within which, under the laws of the
Polish Peoples Republic and in accordance with international law, the Polish
Peoples Republic has sovereignty or sovereign and exclusive rights ; (c) the terms a Contracting State and the other
Contracting State mean India or Poland, as the context requires ; (d) the term tax means Indian tax or Polish tax
as the context requires, but shall not include any amount which is payable in
respect of any default or omission in relation to the taxes to which this
Agreement applies or which represents a penalty imposed relating to those
taxes ; (e) the term person includes an individual, a
company and any other entity which is treated as a taxable unit under the taxation
laws in force in the respective Contracting States ; (f) the term company means 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; (g) the terms enterprise of a Contracting State
and enterprise of the other Contracting State mean respectively an enterprise
carried on by a resident of a Contracting State and an enterprise carried on by
a resident of the other Contracting State ; (h) the term competent authority means in the
case of India, the Central Government in the Ministry of Finance (Department of
Revenue) or their authorised representative; and in the case of Poland, the
Minister of Finance or his authorised representative ; (i) the term
national means any individual possessing the nationality of a Contracting
State and any legal person, partnership or association deriving the status
from the laws in force in the Contracting State ; (j) the term international traffic means any
transport by a ship or aircraft operated by an enterprise of a Contracting
State, except when the ship or aircraft is operated solely between places in
the other Contracting State. 2. As
regards the application of the Agreement by a Contracting State, any term not
defined therein shall, unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the taxes to which the
Agreement applies. ARTICLE
4 - Fiscal residence - 1. For the purposes of this Agreement,
the term resident of a Contracting State means any person who, under the laws
of that State, is liable to tax therein by reason of his domicile, residence,
place of management or any other criterion of a similar nature. 2. Where
by reason of the provisions of paragraph 1, an individual is a resident of
both Contracting States, then his status shall be determined as follows : (a) he shall be deemed to be a resident of the
State in which he has a permanent home available to him; if he has a permanent
home available to him in both States, he shall be deemed to be a resident of
the State with which his personal and economic relations are closer (centre of
vital interests) ; (b) if the State in which he has his centre of
vital interests cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a resident of the
State in which he has an habitual abode ; (c) if he has an habitual abode in both States or
in neither of them, he shall be deemed to be a resident of the State of which
he is a national ; (d) if the question of residence cannot be
determined according to the provisions of sub-paragraphs (a) to (c),
the competent authorities of the Contracting States shall settle the question
by mutual agreement. 3. Where
by reason of the provisions of paragraph 1, a person other than an individual
is a resident of both Contracting States, then it shall be deemed to be a
resident of the State in which its place of effective management is situated. ARTICLE
5 - Permanent establishment - 1. For the purposes of this Agreement,
the term permanent establishment means a fixed place of business through
which the business of the enterprise is wholly or partly carried on. 2. The
term permanent establishment includes especially : (a) a place of management ; (b) a branch ; (c) an office ; (d) a factory ; (e) a workshop ; (f) a mine, an oil or gas well, a quarry or any
other place of extraction of natural resources ; (g) a warehouse in relation to a person providing storage
facilities for others ; (h) a farm, plantation or other place where
agriculture, forestry plantation or related activities are carried on ; (i) premises used as sales outlet or for receiving
or soliciting orders ; (j) an installation or structure used for the
exploration of natural resources ; (k) a building site or construction, installation
or assembly project or supervisory activities in connection therewith, where
such site, project or activities continue for a period of more than six months. 3.
Notwithstanding the preceding provisions of this Article, the term permanent
establishment shall be deemed not to include : (a) the use of facilities solely for the purpose
of storage or display of goods or merchandise belonging to the enterprise ; (b) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of storage or
display ; (c) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of processing by
another enterprise ; (d) the maintenance of a fixed place of business
solely for the purpose of purchasing goods or merchandise, or of collecting
information, for the enterprise ; (e) the maintenance of a fixed place of business
solely for the purpose of advertising, for the supply of information, for scientific
research, or for similar activities which have a preparatory or auxiliary
character, for the enterprise. However,
the provisions of sub-paragraphs (a) to (e) shall not be
applicable where the enterprise maintains any other fixed place of business in
the other Contracting State for any purposes other than the purposes specified
in the said sub-paragraphs. 4.
Notwithstanding the provisions of paragraphs 1 and 2 where a person - other
than an agent of an independent status to whom paragraph 5 applies is acting in
a Contracting State on behalf of an enterprise of the other Contracting State,
that enterprise shall be deemed to have a permanent establishment in the first
mentioned State, if (a) he has and habitually exercises in that State
an authority to conclude contracts on behalf of the enterprise, unless his
activities are limited to the purchase of goods or merchandise for the
enterprise ; 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. 5. An
enterprise of a Contracting State shall not be deemed to have a permanent
establishment in the other Contracting State merely because it carries on
business in that other State through a broker, general commission agent or any
other agent of an independent status provided that such persons are acting in
the ordinary course of their business. However, when the activities of such an
agent are devoted wholly or almost wholly on behalf of that enterprise itself
or on behalf of that enterprise and other enterprises controlling, controlled
by, or subject to the same common control, as that enterprise, he will not be
considered an agent of an independent status within the meaning of this paragraph. 6. The
fact that a company which is a resident of a Contracting State controls or is
controlled by a company which is a resident of the other Contracting State or
which carries on business in that other Contracting State (whether through a
permanent establishment or otherwise), shall not of itself constitute either
company a permanent establishment of the other. ARTICLE
6 - Income from immovable property - 1. Income derived by a resident of a Contracting State
from immovable property (including income from agriculture or forestry)
situated in the other Contracting State may be taxed in that other State. 2. The
term immovable property shall have the meaning which it has under the law of
the Contracting State in which the property in question is situated. The term
shall in any case include property accessory to immovable property, livestock
and equipment used in agriculture and forestry, rights to which the provisions
of general law respecting landed property apply, usufruct for 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 also apply to income derived from the direct
use, letting, or use in any other form of immovable property. 4. The
provisions of paragraphs 1 and 3 shall also apply to the income from immovable
property of an enterprise and to income from immovable property used for the
performance of independent personal services. ARTICLE
7 - Business profits - 1. The profits of an enterprise of a
Contracting State shall be taxable only in that State unless the enterprise
carries on business in the other Contracting State through a permanent
establishment situated therein. If the enterprise carries on business as
aforesaid, the profits of the enterprise may be taxed in the other State but
only so much of them as is attributable to (a) that permanent
establishment; (b) sales in that other State of goods or merchandise of
the same or similar kind as those sold through that permanent establishment; or
(c) other business activities carried on in that other State of the same
or similar kind as those affected through that permanent establishment. 2.
Subject to the provisions of paragraph 3, where an enterprise of a Contracting
State carries on business in the other Contracting State through a permanent
establishment situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it might be
expected to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions and dealing
wholly independently with the enterprise of which it is a permanent
establishment. In any case where the correct amount of profits attributable to
a permanent establishment is incapable of determination or the determination
thereof presents exceptional difficulties, the profits attributable to the
permanent establishment may be estimated on a reasonable basis. 3. In the
determination of the profits of a permanent establishment, there shall be
allowed a deduction expenses which are incurred for the purpose of the business
of the permanent establishment including executive and general administrative
expenses so incurred, whether in the State in which the permanent establishment
is situated or elsewhere, in accordance with the provisions of and subject to
the limitations of the taxation laws of that State. However, no such deduction
shall be allowed in respect of amounts, if any, paid (other 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, know-how or other rights, or by way of
commission or other charges, for specific services performed or for management,
or except in the case of a banking enterprise, by way of interest on moneys
lent to the permanent establishment. Likewise, no account shall be taken, in
the determination of the profits of a permanent establishment, for amounts
charged (otherwise than towards reimbursement of actual expenses) by the
permanent establishment to the head office of the enterprise or any of its
other offices by way of royalties, fees or other similar payments in return for
the use of patents, know-how or other rights, or by way of commission or other
charges for specific services performed or for management, or except in the
case of a banking enterprise, by way of interest on moneys lent to the head
office of the enterprise or any of its other offices. 4. No
profits shall be attributable 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 Agreement, then the provisions of these Articles shall not be
affected by the provisions of this Article. ARTICLE
8 : Air transport - 1. Profits derived by an enterprise of a
Contracting State from the operation of aircraft in international traffic shall
be taxable only in that State. 2. The
provisions of paragraph 1 shall also apply to profits from the participation in
a pool, a joint business or an international operating agency. 3. For
the purposes of this article, interest on funds connected with the operation of
aircraft in international traffic shall be regarded as profits derived from the
operation of such aircraft, and the provisions of article 12 shall not apply in
relation to such interest. 4. The
term operation of aircraft shall mean business of transportation by air of
passengers, mail, livestock or goods carried on by the owners or lessees or
charterers of aircraft, including the sale of tickets for such transportation
on behalf of other enterprises, the incidental lease of aircraft and any other
activity directly connected with such transportation. ARTICLE
9 - Shipping - 1. Profits from the operation of ships in
international traffic shall be taxable only in the Contracting State in which
the place of effective management of the enterprise is situated. 2. If the
place of effective management of an enterprise carrying on shipping in
international traffic is aboard a ship, then it shall be deemed to be situated
in the Contracting State in which the home harbour of the ship is situated, or,
if there is no such home harbour, in the Contracting State in which the
operator of the ship is a resident. 3. The
provisions of paragraph 1 shall also apply to profits derived from the
participation in a pool, a joint business or in an international operating
agency. 4.
Notwithstanding anything contained in paragraph 1 and article VIII of the
Agreement dated 27 June, 1960 between the Government of India and the
Government of the Polish Peoples Republic regarding shipping cooperation,
income derived by an enterprise of a Contracting State from the operation of
ships from the ports of the other Contracting State to the ports of third
countries and from the ports of third countries to the ports of the other Contracting
State may be taxed in the other Contracting State, but the tax imposed in that
other Contracting State shall be reduced by an amount equal to 50 per cent
thereof. ARTICLE
10 - Associated enterprises -
Where : (a) an enterprise of a Contracting State
participates directly or indirectly in the management, control or capital of an
enterprise of the other Contracting State, or (b) the same persons participate directly or
indirectly in the management, control or capital of an enterprise of a Contracting
State and an enterprise of the other Contracting State, and in
either case, conditions are made or imposed between the two enterprises in
their commercial or financial relations which differ from those which would be
made between independent enterprises, then any profits which would, but for
those conditions, have accrued to one of the enterprises, but, by reason of
those conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly. ARTICLE
11 - Dividends - 1. Dividends paid by a company which is
resident of a Contracting State to a resident of the other Contracting State
may be taxed in that other State. 2.
However, such dividends may also be taxed in the Contracting State of which the
company paying the dividends is a resident and according to the laws of that
State, but if the recipient is the beneficial owner of the dividends, the tax
so charged shall not exceed 15 per cent of the gross amount of the dividends
where such dividends relate to contributions made after the entry into force of
this Agreement. The
paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid. 3. The
term dividends as used in this Article means income from shares or other rights,
not being debt-claims, participating in profits, as well as income from other
corporate rights which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company making the distribution
is resident. 4. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
dividends, being a resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the dividends is a
resident, through a permanent establishment situated therein or performs in
that other State independent personal services from a fixed base situated
therein, and the holding in respect of which the dividends are paid is
effectively connected with such permanent establishment or fixed base. In such
case, the provisions of article 7 or article 15, as the case may be, shall
apply. 5. Where
a company which is a resident of a Contracting State derives profits or income
from the other Contracting State, that other State may not impose any tax on
the dividends paid by the company except insofar as such dividends are paid to
a resident of that other State or 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 the undistributed profits consist wholly or partly of
profits or income arising in such other State. ARTICLE
12 - Interest - 1. Interest arising in a Contracting State and
paid to a resident of the other Contracting State may be taxed in that other
State. 2.
However, such interest may also be taxed in the Contracting State in which it
arises and according to the laws of that State, but if the recipient is the
beneficial owner of the interest the tax so charged shall not exceed 15 per
cent of the gross amount of the interest. 3.
Notwithstanding the provisions of paragraph 2, (a) interest arising in a Contracting State shall
be exempt from tax in that State provided it is derived and beneficially owned
by : (i) the Government, a political sub-division or a
local authority of the other Contracting State ; or (ii) the Central Bank of the other Contracting
State ; (b) interest arising in a Contracting State shall
be exempt from tax in that State if it is beneficially owned by a resident of
the other Contracting State and is derived in connection with a loan or credit
extended or endorsed by : (i) in the case of Poland, Bank Handlowy w
Warszawie SA to the extent such interest is attributable to financing of
exports and imports only ; (ii) in the case of India, the Export-Import Bank
of India (Exim Bank) to the extent such interest is attributable to financing
of exports and imports only ; (iii) any institution of a Contracting State in
charge of public financing of external trade ; (iv) any other person provided that the loan or
credit is approved by the Government of the first-mentioned Contracting State. 4. The
term interest as used in this article means income from debt-claims of every
kind, whether or not secured by mortgage and whether or not carrying a right to
participate in the 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 State independent
personal services from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively connected with such
permanent establishment or fixed base. In such case, the provisions of article
7 or article 15, as the case may be, shall apply. 6.
Interest shall be deemed to arise in a Contracting State when the payer is that
Contracting State itself, a political sub-division, a local authority or a
resident of that State. Where, however, the person paying the interest, whether
he is a resident of a Contracting State or not, has in a Contracting State a
permanent establishment or a fixed base in connection with which the indebtedness
on which the interest is paid was incurred and such interest is borne by such
permanent establishment or fixed base, then such interest shall be deemed to
arise in the Contracting State in which the permanent establishment or fixed
base is situated. 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 to the
last-mentioned amount. In such case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State, due regard
being had to the other provisions of this Agreement. ARTICLE
13 - 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 22.5 per cent of
the gross amount of the royalties or fees for technical services. 3. The
term royalties as used in this article means payments of any kind received as
a consideration for the use of, or the right to use, any copyright of literary,
artistic or scientific work, including cinematograph films or tapes used for
radio or television broadcasting, any patent, trade mark, design or model,
plant, secret formula or process, or for the use of, or the right to use,
industrial, commercial or scientific equipment, or for information concerning
industrial, commercial or scientific experience. 4. The
term fees for technical services as used in this article means payments of
any amount to any person other than payments to an employee of a person making
payments, in consideration for the services of a managerial, technical or
consultancy nature, including the provision of services of technical or other
personnel. 5. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
royalties or fees for technical services, being a resident of a Contracting
State, carries on business in the other Contracting State in which the
royalties or fees for technical services arise, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the right, property
or contract in respect of which the royalties or fees for technical services
are paid is effectively connected with such permanent establishment or fixed
base. In such case, the provisions of article 7 or article 15, as the case may
be, shall apply. 6.
Royalties and fees for technical services shall be deemed to arise in a
Contracting State when the payer is that State itself, a political
sub-division, a local authority or a resident of that State. Where, however,
the person paying the royalties or fees for technical services, whether he is a
resident of a Contracting State or not, has in a Contracting State a permanent
establishment or a fixed base in connection with which the liability to pay
the royalties or fees for technical services was incurred, and such royalties
or fees for technical services are borne by such permanent establishment or
fixed base, then such royalties or fees for technical services shall be deemed
to arise in the State in which the permanent establishment or fixed base is
situated. 7. Where,
by reason of special relationship between the payer and the beneficial owner or
between both of them and some other person, the amount of royalties or fees for
technical services paid exceeds the amount which would have been paid in the
absence of such relationship, the provisions of this article shall apply only
to the last-mentioned amount, and in such case, the excess part of the payments
shall remain taxable according to the laws of each Contracting State, due
regard being had to the other provisions of this Agreement. ARTICLE
14 - Capital gains - 1. Gains derived by a resident of a
Contracting State from the alienation of immovable property, referred to in
article 6, and situated in the other Contracting State may be taxed in that
other State. 2. Gains
from the alienation of movable property forming part of the business property
of a permanent establishment which an enterprise of a Contracting State has in
the other Contracting State or of movable property pertaining to a fixed base
available to a resident of a Contracting State in the other Contracting State
for the purpose of performing independent personal services, including such
gains from the alienation of such a permanent establishment (alone or together
with the whole enterprise) or of such fixed base, may be taxed in that other
State. 3. Gains
from the alienation of ships or aircraft operated in international traffic or
movable property pertaining to the operation of such ships or aircraft shall be
taxable only in the Contracting State of which the alienator is a resident. 4. Gains
from the alienation of shares of the capital stock of a company the property of
which consists directly or indirectly principally of immovable property
situated in a Contracting State may be taxed in that State. 5. Gains
from the alienation of shares other than those mentioned in paragraph 4 in a
company which is a resident of a Contracting State may be taxed in that State. 6. Gains
from the alienation of any property other than that 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
15 - Independent personal services - 1. Income derived by an
individual who is a resident of a Contracting State from the performance of
professional services or other independent activities of a similar character
shall be taxable only in that State except in the following circumstances when
such income may also be taxed in the other Contracting State : (a) if he has a fixed base regularly available to
him in the other Contracting State for the purpose of performing his activities;
in that case, only so much of the income as is attributable to that fixed base
may be taxed in that other State ; or (b) if his stay in the other Contracting State is
for a period or periods amounting to or exceeding in the aggregate 183 days in
the relevant previous year or year of income, as the case may be; in that
case, only so much of the income as is derived from his activities performed in
that other State may be taxed in that other State. 2. The
term professional services includes independent scientific, literary,
artistic, educational, or teaching activities, as well as the independent
activities of physicians, surgeons, lawyers, engineers, architects, dentists
and accountants. ARTICLE
16 - Dependent personal services - 1. Subject to the
provisions of Articles 17, 18, 19, 20, 21 and 22, 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
previous year or year of income, as the case may be ; and (b) the remuneration is paid by, or on behalf of,
an employer who is not a resident of the other State ; and (c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the other State. 3.
Notwithstanding the preceding provisions of this article, remuneration derived
in respect of an employment exercised aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting State may be taxed in
that State. ARTICLE
17 - Directors fees remuneration of top-level managerial officials -
1. Directors fees and similar payments derived by a resident of a
Contracting State in his capacity as a member of the Board of Directors of a
company which is a resident of the other Contracting State may be taxed in that
other State. 2.
Salaries, wages and other similar remuneration derived by a resident of a
Contracting State in his capacity as an official in a top-level managerial
position of a company which is a resident of the other Contracting State may be
taxed in that other State. ARTICLE
18 - Income earned by entertainers and athletes - 1.
Notwithstanding the provisions of Articles 15 and 16, income derived by a
resident of a Contracting State as an entertainer such as a theatre, motion
picture, radio or television artiste or a musician or as an athlete, from his
personal activities as such exercised
in the other Contracting State may be taxed in that other State. 2. Where
income in respect of personal activities exercised by an entertainer or athlete
in his capacity as such accrues not to the entertainer or athlete himself but
to another person, that income may, notwithstanding the provisions of Articles
7, 15 and 16, be taxed in the Contracting State in which the activities of the
entertainer or athlete are exercised. 3.
Notwithstanding the provisions of paragraph 1, income derived by an entertainer
or an athlete who is a resident of a Contracting State from his personal
activities as such exercised in the other Contracting State, shall be taxable
only in the first-mentioned Contracting State, if the activities in the other
Contracting State are within the framework of cultural or sports exchange
programme agreed to by both Contracting States and are supported wholly or
substantially from the public funds of the first-mentioned Contracting State,
including any of its political sub-divisions or local authorities. 4.
Notwithstanding the provisions of paragraph 2 and Articles 7, 15 and 16, where
income in respect of personal activities exercised by an entertainer or an
athlete in his capacity as such in a Contracting State accrues not to the
entertainer or athlete himself but to another person, that income shall be
taxable only in the other Contracting State, if the activities of that other
person are within the framework of cultural or sports exchange programme agreed
to by both Contracting States and are supported wholly or substantially from
the public funds of that other State, including any of its political
sub-divisions or local authorities. ARTICLE
19 - Remuneration and pensions in respect of Government service - 1.
(a) Remuneration other than pension, paid by a Contracting State or
a political sub-division or a local authority thereof to an individual in
respect of services rendered to that Contracting State or a political
sub-division or local authority thereof in discharge of functions of a
governmental nature, shall be taxable only in that Contracting State. (b)
However, such remuneration shall be taxable only in the other Contracting State
if the services are rendered in that other State and the individual is a
resident of that State who : (i) is a national of that State; or (ii) did not become a resident of that State solely
for the purpose of rendering the services. 2. (a)
Any pension paid by, or out of funds created by a Contracting State or a
political sub-division or a local authority thereof to an individual in respect
of services rendered to that State or sub-division or authority shall be
taxable only in that State. (b)
However, such pension shall be taxable only in the other Contracting State if
the individual is a resident of, and a national of, that other State. 3. The
provisions of Articles 16, 17 and 18 shall apply to remuneration and pensions
in respect of services rendered in connection with a business carried on by a
Contracting State or a political sub-division or local authority thereof. Article 20 - Non-governmental pensions
and annuities - 1. Any pension, other than a pension referred to in Article
19, or any annuity derived by a resident of a Contracting State from sources
within the other Contracting State may be taxed only in the first-mentioned Contracting
State. 2. The
term pension means a periodic payment made in consideration of past services
or by way of compensation for injuries received in the course of performance of
services. 3. The
term annuity means a stated sum payable periodically at stated times during
life or during a specified or ascertainable period of time, under an obligation
to make the payments in return for adequate and full consideration in money or
moneys worth. Article 21 - Payments received by
students and apprentices - 1. Payments which a student or business
apprentice who is or was immediately before visiting a Contracting State a
resident of the other Contracting State and who is present in the
first-mentioned State solely for the purpose of his education or training
receives for the purpose of his maintenance, education or training shall not
be taxed in that State, provided that such payments arise from sources outside
that State. 2. Income
derived by a student or business apprentice in respect of activities exercised
in a Contracting State in which he is present solely for the purpose of his
education or training, shall not be taxable in that State, unless it exceeds
the amount necessary for his maintenance, education or training. 3. The
benefits of this Article shall extend only for such period of time as may be
reasonable or customarily required to complete the education or training
undertaken, but in no event shall any individual have the benefits of this
Article, for more than five consecutive years from the date of his first
arrival in that other Contracting State. (4)
For the purposes of this Article and Article 22, an individual shall be deemed
to be a resident of a Contracting State if he is resident in that Contracting
State in the previous year or the year of income, as the case may be, in
which he visits the other Contracting State or in the immediately preceding
previous year or year of income. Article 22 - Payments received by
professors, teachers and research scholars - 1. A professor or teacher who
is or was a resident of one of the Contracting States immediately before
visiting the other Contracting State for the purpose of teaching or engaging in
research, or both, at a university, college, school or other approved
institution in that other Contracting State shall be exempt from tax in that
other State or 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 not in
public interest but 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 concerned
Contracting State. Article 23 - Other income - 1.
Subject to the provisions of paragraph 2, items of income of a resident of
Contracting State, wherever arising which are not expressly dealt with in the
foregoing Articles of this Agreement, shall be taxable only in that
Contracting State. 2. The
provisions of paragraph 1 shall not apply in income, other than income from
immovable property as defined in paragraph 2 of Article 6, if the recipient of
such income, being a resident of a Contracting State, carries on business in
the other Contracting State through a permanent establishment situated
therein, or performs in that other State independent personal services from a
fixed base situated therein, and the right of property in respect of which the
income is paid is effectively connected with such permanent establishment or
fixed base. In such cases, the provisions of Article 7 or Article 15, as the
case may be, shall apply. 3.
Notwithstanding the provisions of paragraphs 1 and 2, items of income of a
resident of a Contracting State not dealt with in the foregoing Articles of
this Agreement, and arising in the other Contracting State may be taxed in that
other State. 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. The competent authorities shall through consultations develop
appropriate bilateral procedures, conditions, methods and techniques for the
implementation of the mutual agreement procedure provided for in this Article. Article 24 - Elimination of double
taxation - 1. The laws in force in either of the Contracting States will
continue to govern the taxation of income in the respective Contracting States
except where provisions to the contrary are made in this Agreement. 2. In
both the Contracting States, double taxation will be avoided in the following
manner : (a) Where a resident of a Contracting State derives
income which, in accordance with the provisions of this agreement, may be taxed
in the other Contracting State, the first-mentioned State shall, subject to the
provisions of sub-paragraph (b) of this paragraph, exempt such income
from tax but may, in calculating tax on the remaining income of that person,
apply the rate of tax which would have been applicable if the exempted income
has not been so exempted. (b) Either of the Contracting States when imposing
taxes on its residents may include in the tax base upon which such taxes are
imposed the items of income which according to the provisions of articles 11,
12 and 13 of this Agreement may also be taxed in the other State but shall
allow as a deduction from the amount of tax computed on such a base an amount
equal to the tax paid in other Contracting State. Such deduction shall not,
however, exceed that part of tax leviable by the first-mentioned State, as
computed before the deduction is given, which is appropriate to the income
which, in accordance with the provisions of Articles 11, 12 and 13 of this
Agreement, may be taxed in the other State. 3. For
the purpose of sub-paragraph (b) of paragraph 2 the term tax paid in
the other Contracting State shall be deemed to include any amount which would
have been payable as tax but for any relief by way of a deduction allowed in
computing the taxable income or an exemption or a reduction of tax or otherwise
under the laws relating to taxation of income in force in that other Contracting
State. Article 25 - Non-discrimination - 1.
The nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected therewith which
is other or more burdensome than the taxation, and connected requirements to
which nationals of that other State in the same circumstances and under the
same conditions are or may be subjected. 2. The
taxation on a permanent establishment which an enterprise of a Contracting
State has in the other Contracting State shall not be less favourably levied in
that other State than the taxation levied on enterprises of that other State
carrying on the same activities in the same circumstances or under the same
conditions. 3.
Nothing contained in this Article shall be construed as obliging a Contracting
State to grant to persons not resident in that State any personal allowances,
reliefs, 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
Contracting State to any taxation or any requirement connected therewith which
is other or more burdensome than the taxation and connected requirements to
which other similar enterprises of that first-mentioned State are or may be
subjected in the same circumstances and under the same conditions. 5. In
this Article, the term taxation means taxes which are the subject of this
Agreement. 6. Except
where the provisions of Article 11, paragraph 7 of Article 12, or paragraph 7
of Article 13 of this Agreement apply, interest, royalties and other disbursements
paid by an enterprise of a Contracting State to a resident of the other
Contracting State shall, for the purpose of determining the taxable profits of
such enterprise, be deductible under the same conditions as if they had been
paid to a resident of the first-mentioned State. Similarly, any debts of an
enterprise of a Contracting State to a resident of the other Contracting State
shall, for the purpose of determining the 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. 7. The
exemptions, reliefs, reductions, deductions and allowances for taxation
purposes available under the domestic laws of the two Contracting States shall
not be adversely affected by any provision of this Agreement. Article 26 - Mutual agreement procedure
- 1. Where a resident of a Contracting State considers that the actions of
one or both of the Contracting States result or will result for him in taxation
not in accordance with this Agreement, he may, notwithstanding the remedies
provided by the national laws of those States, present his case to the
competent authority of the Contracting State of which he is a resident. This
case must be presented within three years of the date of receipt of notice of
the action which gives rise to taxation not in accordance with the Agreement. 2. The
competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at an appropriate solution, to
resolve the case by mutual agreement with the competent authority of the other
Contracting State, with a view to avoidance of taxation not in accordance with
the Agreement. Any agreement reached shall be implemented notwithstanding any
time limits in the national laws of the Contracting States. 3. The
competent authorities of the Contracting States shall endeavour to resolve by
mutual agreement any difficulties or doubts arising as to the interpretation or
application of the Agreement. They may also consult together for the
elimination of double taxation in cases not provided for in the Agreement. 4. The
competent authorities of the Contracting States may communicate with each other
directly for the purpose of reaching an agreement in the sense of the preceding
paragraphs. When it seems advisable in order to reach agreement to have an oral
exchange of opinions, such exchange may take place through a Commission
consisting of representatives of the competent authorities of the Contracting
States. Article 27 - Exchange of information -
1. The competent authorities of the Contracting States shall exchange such
information (including documents) as is necessary for carrying out the provisions
of the Agreement or of the domestic laws of the Contracting States concerning
taxes covered by the Agreement, insofar as the taxation, thereunder is not
contrary to the Agreement, in particular for the prevention of fraud or evasion
of such taxes. Any information received by a Contracting State shall be treated
as secret in the same manner as information obtained under the domestic laws of
that State. However, if the information is originally regarded as secret in the
transmitting State, it shall be disclosed only to persons or authorities
(including courts and administrative bodies) involved in the assessment or
collection of, the enforcement or prosecution in respect of, or the determination
of appeals in relation to, the taxes which are the subject of the Agreement.
Such persons or authorities shall use the information only for such purposes
but may disclose the information in public court proceedings or in judicial
decisions. The competent authorities shall, through consultation, develop appropriate
conditions, methods and techniques concerning the matters in respect of which
such exchange of information shall be made, including, where appropriate,
exchange of information regarding tax avoidance. 2. The
exchange of information or documents shall be either on a 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 28 - Assistance in collection -
1. The Contracting States undertake to lend assistance and support to each
other, in the collection of the taxes to which this agreement relates, in the cases
where the taxes are definitely due according to the laws of the States making
the request. 2. In the
case of a request for enforcement of collection, tax claims of either of the
Contracting States which have been finally determined will be accepted for
enforcement by the other Contracting State to which the request is made and
collected in that State in accordance with the laws applicable to the enforcement
and collection of its taxes. 3. In the
case of Indian tax, the request will be sent by the Central Board of Direct
Taxes, Department of Revenue, Ministry of Finance, India to Minister of
Finance, Poland or his authorised representative and will be accompanied by
such certificate as is required by the laws of India to establish that the
taxes have been finally determined and are due from the taxpayer. 4. In the
case of Poland tax, the request will be sent by the Minister of Finance, Poland
or his authorised representative to the Central Board of Direct Taxes,
Department of Revenue, Ministry of Finance, India and will be accompanied by
such certificate as is required by the laws of Poland to establish that the
taxes have been finally determined and are due from the taxpayer. 5. Where
the tax claim has not become final by reason of its being subject to appeal or
any other proceeding, a Contracting State may, in order to protect its
revenues, request the other Contracting State to take such interim measures in
this behalf as are lawful under the laws of that other Contracting State. 6. A
request for assistance in collection of taxes due from a taxpayer shall be made
only if adequate assets of that taxpayer are not available for recovering the
taxes from him in the Contracting State making the request. 7. The
Contracting State in which tax is recovered in pursuance of paragraphs 1, 2 and
5 of this Article shall immediately thereafter remit the amount so recovered
to the Contracting State which made the request. Article 29 - Diplomatic and Consular
Activities - Nothing in this Agreement shall affect the fiscal privileges
of diplomatic or consular officials under the general rules of international
law or under the provisions of special agreements. Article 30 - Entry into force -
Each of the Contracting States shall notify to the other the completion of the
procedures required by its law for the bringing into force of this Agreement.
This Agreement shall enter into force on the date of the later of these
notifications and shall thereupon have effect: (a) in India, in respect of income arising in any
previous year beginning on or after the first day of April next following the
calendar year in which the later of the notifications is given ; (b) in Poland, in respect of income arising in any
year of income beginning on or after the first day of January next following
the calendar year in which the later of the notifications is given. Article 31 - Termination - This
Agreement shall remain in force indefinitely but either of the Contracting
States may, on or before the thirtieth day of June in any calendar year
beginning after the expiration of a period of five years from the date of its
entry into force, give the other Contracting State through diplomatic channels,
written notice of termination and, in such event, this Agreement shall cease to
have effect : (a) in India, in respect of income arising in any
previous year beginning on or after the 1st day of April next following the
calendar year in which the notice is given ; (b) in Poland, in respect of income arising in any
year of income beginning on or after the 1st day of January next following the
calendar year in which the notice of termination is given. In witness whereof the undersigned, being duly
authorised thereto, have signed the present Agreement. Done in duplicate at WARSAW this twenty-first day of June, one thousand nine hundred and eighty-nine in the Hindi, Polish and English languages, all the texts being equally authentic. In case of divergence between the Hindi and Polish texts the English text shall prevail.
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