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Singapore 41. Agreement for avoidance of double taxation
and prevention of fiscal evasion with Singapore Whereas the annexed Agreement between the Government of the Republic of India and the Government of the Republic of Singapore for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income has entered into force on 27th May, 1994 on the notification by both the Contracting States to each other of the completion of the procedures required by their respective laws, as required by the said Agreement; Now,
therefore, in exercise of the powers conferred by section 90 of the Income-tax Act,
1961 (43 of 1961), the Central Government hereby directs that all the
provisions of the said Agreement shall be given effect to in the Union of
India. Notification : No. GSR
610(E), dated 8-8-1994.
TEXT OF AMENDED AGREEMENT The
Government of the Republic of India and the Government of the Republic of
Singapore, desiring to conclude an Agreement for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on income, Have
agreed as follows : 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 : income-tax
including any surcharge thereon (hereinafter
referred to as Indian tax) ; (b) in Singapore : the
income-tax (hereinafter referred to as
Singapore 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. ARTICLE
3 : General definitions - 1. In this Agreement, unless the
context otherwise requires : (a) the term India means the territory of India
and includes the territorial sea and air space above it, as well as any other
maritime zone in which India has sovereign rights, other rights and
jurisdictions, according to the Indian law and in accordance with international
law ; (b) the term Singapore means the Republic of
Singapore ; (c) the terms a Contracting State and the other
Contracting State mean India or Singapore as the context requires ; (d) the term company means any body corporate or
any entity which is treated as a company or body corporate under the taxation
laws in force in the respective Contracting States ; (e) the term competent authority means 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 Singapore,
the Minister for Finance or his
authorised representative ; (f) the terms enterprise of a Contracting State
and enterprise of the other Contracting State mean respectively and
enterprise carried on by a resident of a Contracting State and an enterprise
carried on by a resident of the other Contracting State; (g) the term fiscal year means : (i) in the case of India, previous year as
defined under section 3 of the Income-tax Act, 1961 ; (ii) in the case of Singapore, calendar year ; (h) 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 ; (i) the term national means any individual,
possessing the nationality of a Contracting State and any legal person,
partnership or association deriving its status as such from the laws in force
in the Contracting State ; (j) the term person includes an individual, a
company, a body of persons and any other entity which is treated as a taxable
unit under the taxation laws in force in the respective Contracting States ; (k) the term tax means Indian tax or Singapore
tax, as the context requires, but shall not include any amount which is payable
in respect of any default or omission in relation to the taxes to which this Agreement applies or which
represents a penalty imposed relating to those taxes. 2. As
regards the application of the Agreement by a Contracting State, any term not defined
therein shall, unless the context otherwise requires, have, the meaning which
it has under the law of that State concerning the taxes to which the Agreement
applies. ARTICLE
4 : Resident - 1. For the purposes of this Agreement, the
term resident of a Contracting State means any person who is a resident of a
Contracting State in accordance with the taxation laws of that State. 2. Where
by reason of the provisions of paragraph 1, an individual is a resident of
both Contracting States, then his status shall be determined as follows : (a) he shall be deemed to be a resident of the
State in which he has a permanent home available to him; if he has a permanent
home available to him in both States, he shall be deemed to be a resident of
the State with which his personal and economic relations are closer (centre of
vital interests) ; (b) if the State in which he has his centre of
vital interests cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a resident of the
State in which he has an habitual abode ; (c) if he has an habitual abode in both States or
in neither of them, he shall be deemed to be a resident of the State of which he is a national ; (d) if he is a national of both States or of
neither of them, the competent authorities of the Contracting States shall
settle the question by mutual agreement. 3. Where
by reason of the provisions of paragraph 1, a person other than an individual
is a resident of both Contracting States, then it shall be deemed to be a
resident of the State in which its place of effective management is situated. ARTICLE
5 : Permanent establishment - 1. For the purposes of this
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 a sales outlet or for
soliciting and receiving orders ; (j) an installation or structure used for the
exploration or exploitation of natural resources but only if so used for a
period of more than 120 days in any fiscal year. 3. A
building site or construction, installation or assembly project constitutes a
permanent establishment only if it continues for a period of more than 183
days in any fiscal year. 4. An
enterprise shall be deemed to have a permanent establishment in a Contracting
State and to carry on business through that permanent establishment if it
carries on supervisory activities in that Contracting State for a period of
more than 183 days in any fiscal year in connection with a building site or
construction, installation or assembly project which is being undertaken in
that Contracting State. 5.
Notwithstanding the provisions of paragraphs 3 and 4, and enterprise shall be
deemed to have a permanent establishment in a Contracting State and to carry on
business through that permanent establishment if it provides services or
facilities in that Contracting State for a period of more than 183 days in any
fiscal year in connection with the exploration, exploitation or extraction of
mineral oils in that Contracting State. 6. An
enterprise shall be deemed to have a permanent establishment in a Contracting
State if it furnishes services, other than services referred to in paragraphs 4
and 5 of this Article and technical services as defined in Article 12, within a
Contracting State through employees or other personnel, but only if : (a) activities of that nature continue within that
Contracting State for a period or periods aggregating more than 90 days in any
fiscal year; or (b) activities are performed for a related
enterprise (within the meaning of Article 9 of this Agreement) for a period or
periods aggregating more than 30 days in any fiscal year. 7.
Notwithstanding the preceding provisions of this Article, the term permanent establishment
shall be deemed not to include : (a) the use of facilities solely for the purpose
of storage, display or occasional delivery of goods or merchandise belonging
to the enterprise ; (b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage, display or
occasional delivery; (c) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of processing by
another enterprise ; (d) the maintenance of a fixed place of business
solely for the purpose of purchasing goods or merchandise, or of collecting
information, for the enterprise ; (e) the maintenance of a fixed place of business
solely for the purpose of 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 through which the business of the enterprise is
wholly or partly carried on. 8.
Notwithstanding the provisions of paragraphs 1 and 2, where a person - other
than an agent of an independent status to whom paragraph 9 applies - is acting
in a Contracting State on behalf of an enterprise of the other Contracting
State that enterprise shall be deemed to have a permanent establishment in the
first-mentioned State, if (a) he has and habitually exercises in that State
an authority to conclude contracts on behalf of the enterprise, unless his
activities are limited to the purchase of goods or merchandise for the
enterprise ; (b) he has no such authority, but habitually
maintains in the first-mentioned State a stock of goods or merchandise from
which he regularly delivers goods or merchandise on behalf of the enterprise ;
or (c) he habitually secures orders in the
first-mentioned State, wholly or almost wholly for the enterprise itself or for
the enterprise and other enterprises controlling, controlled by, or subject to
the same common control, as that enterprise. 9. 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. 10. 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 situated in the other
Contracting State may be taxed in that other State. 2. The
term immovable property shall have the meaning which it has under the law of
the Contracting State in which the property in question is situated. The term shall in any case include property
accessory to immovable property, livestock and equipment used in agriculture
and forestry, rights to which the provisions of general law respecting landed
property apply usufruct of immovable property and rights to variable or fixed
payments as consideration for the working of, or the right to work, mineral
deposits, sources and other natural resources. Ships and aircraft shall not be
regarded as immovable property. 3. The
provisions of paragraph 1 shall 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 it directly or
indirectly attributable to that permanent establishment. 2.
Subject to the provisions of paragraph 3, where an enterprise of a Contracting
State carries on business in the other Contracting State through a permanent
establishment situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it might be
expected to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions and dealing
wholly independently with the enterprise of which it is a permanent
establishment. In any case where the correct amount of profits attributable to
a permanent establishment is incapable of determination or the determination
thereof presents exceptional difficulties, the profits attributable to the permanent
establishment may be estimated on a
reasonable basis. 3. In the
determination of the profits of a permanent establishment, there shall be
allowed as deductions expenses which are incurred for the purposes of the
business of the permanent establishment including executive and general
administrative expenses so incurred, whether in the State in which the
permanent establishment is situated or elsewhere, in accordance with the provisions
of and subject to the limitations of the taxation laws of that State. 4.
Insofar as it has been customary in the Contracting State to determine the
profits to be attributed to a permanent establishment on the basis of an
apportionment of the total profits of the enterprise to its various parts,
nothing in paragraph 2 shall preclude that Contracting State from determining
the profits to be taxed by such an apportionment as may be customary; the
method of apportionment adopted shall, however, be such that the result shall
be in accordance with the principles contained in this Article. 5. No
profits shall be attributed to a permanent establishment by reason of the mere
purchase by that permanent establishment of goods or merchandise for the
enterprise. 6. For
the purposes of the preceding paragraphs, the profits to be attributed to the
permanent establishment shall be determined by the same method year by year
unless there is good and sufficient reason to the contrary. 7. Where
profits include items of income which are dealt with separately in other
Articles of this Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article. 8. For
the purpose of paragraph 1, the term directly or indirectly attributable to
the permanent establishment includes profits arising from transactions in
which the permanent establishment has been involved and such profits shall be
regarded as attributable to the permanent establishment to the extent appropriate
to the part played by the permanent establishment in those transactions, even
if those transactions are made or placed directly with the overseas head office
of the enterprise rather than with the permanent establishment. ARTICLE
8 : Shipping and air transport - 1. Profits derived by an
enterprise of a Contracting State from the operation of ships or aircraft in
international traffic shall be taxable only in that State. 2. The
provisions of paragraph 1 shall also apply to profits from the participation in
a pool, a joint business or an international operating agency engaged in the
operation of ships or aircraft. 3.
Interest on funds connected with the operation of ships or aircraft in
international traffic shall be regarded as profits derived from the operation
of such ships or aircraft, and the provisions of Article 11 shall not apply in
relation to such interest. 4. For
the purposes of this Article, profits from the operation of ships or aircraft
in international traffic shall mean profits derived from the transportation by
sea or air of passengers, mail, livestock or goods carried on by the owners or
lessees or charterers of the ships or aircraft, including profits from : (a) the sale of tickets for such transportation on
behalf of other enterprises; (b) the incidental lease of ships or aircraft used
in such transportation; (c) the use, maintenance or rental or containers
(including trailers and related equipment for the transport of containers) in
connection with such transportation; and (d) any other activity directly connected with such transportation. ARTICLe 9 : Associated enterprises - Where (a) an enterprise of a Contracting State
participates directly or indirectly in the management, control or capital of an
enterprise of the other Contracting State, or (b) the same persons participate directly or
indirectly in the management, control or capital of an enterprise of a
Contracting State and an enterprise of the other Contracting State, and in
either case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made
between independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of those
conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly. Article 10 : Dividends - 1.
Dividends paid by a company which is a resident of a Contracting State to a
resident of the other Contracting State may be taxed in that other State. 2.
However, such dividends may also be taxed in the Contracting State of which the
company paying the dividends is a resident and according to the laws of that
State, but if the recipient is the beneficial owner of the dividends, the tax
so charged shall not exceed : (a) 10 per cent of the gross amount of the
dividends if the beneficial owner is a company which owns at least 25 per cent
of the shares of the company paying the dividends; (b) 15 per cent of the gross amount of the
dividends in all other cases. This
paragraph shall not affect the taxation of the company in respect of the
profits out of which the dividends are paid. 3.
Notwithstanding the provisions of paragraph 2 of this Article, as long as
Singapore does not impose a tax on dividends in addition to the tax chargeable
on the profits or income of a company, dividends paid by a company which is a
resident of Singapore to a resident of India shall be exempt from any tax in
Singapore which may be chargeable on dividends in addition to the tax
chargeable on the profits or income of the company. 4. The
term dividends as used in this Article means income from shares or other
rights not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as income
from shares by the laws of the State of which the company making the distribution
is a resident. 5. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
dividends, being a resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the dividends is a resident
through a permanent establishment situated therein or performs in that other
State independent personal services from a fixed base situated therein, and the
holding in respect of which the dividends are paid is effectively connected
with such permanent establishment or fixed base. In such case, the provisions
of Article 7 or Article 14, as the case may be, shall apply. 6. Where
a company which is a resident of a Contracting State derives profits or income
from the other Contracting State, that other State may not impose any tax on
the dividends paid by the company except 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. 7. (a)
Dividends shall be deemed to arise in India if they are paid by a company which
is a resident of India ; (b)
Dividends shall be deemed to arise in Singapore : (i) if they are paid by a company which is a
resident of Singapore ; or (ii) if they are paid by a company which is a
resident of Malaysia out of profits arising in Singapore and qualifying as
dividends arising in Singapore under Article VII of the Agreement for the
Avoidance of Double Taxation between Singapore and Malaysia signed on 26th
December, 1968. Article 11 : Interest - 1.
Interest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State. 2.
However, such interest may also be taxed in the Contracting State in which it
arises, and according to the laws of that State, but if the beneficial owner of
the interest is a resident of the other Contracting State, the tax so charged
shall not exceed : (a) 10 per cent of the gross amount of the
interest if such interest is paid on a loan granted by a bank carrying on a bona
fide banking business or by a similar financial institution (including an
insurance company) ; (b) 15 per cent of the gross amount of the
interest in all other cases. 3. The
term interest as used in this Article means income from debt-claims of every
kind, whether or not secured by mortgage and whether or not carrying a right to
participate in the 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. 4. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
interest, being a resident of a Contracting State, carries on business in the
other Contracting State in which the interest arises, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively connected with such
permanent establishment or fixed base. In such case, the provisions of Article
7 or Article 14, as the case may be, shall apply. 5.
Interest shall be deemed to arise in a Contracting State when the payer is that
Contracting State itself, a political sub-division, a local authority, a
statutory body 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. 6. Where,
by reason of a special relationship between the payer and the beneficial owner
or between both of them and some other person, the amount of the interest,
having regard to the debt-claim for which it is paid, exceeds the amount which would
have been agreed upon by the payer and the beneficial owner in the absence of
such relationship, the provisions of this Article shall apply to the
last-mentioned amount. In such case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State, due regard
being had to the other provisions of this Agreement. Article 12 : Royalties and fees for
technical services - 1. Royalties and fees for technical services arising in
a Contracting State and paid to a resident of the other Contracting State may
be taxed in that other State.
1[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
Contracting 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.] 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 : (a) any copyright of a literary, artistic or
scientific work, including cinematograph film or films or tapes used for radio
or television broadcasting, any patent, trade mark, design or model, plan,
secret formula or process, or for information concerning industrial, commercial
or scientific experience, including gains derived from the alienation of any such
right, property or information ; (b) any industrial, commercial or scientific
equipment, other than payments derived by an enterprise from activities
described in paragraph 4(b) or 4(c) of Article 8. 4. The
term fees for technical services as used in this Article means payments of
any kind to any person in consideration for services of a managerial, technical
or consultancy nature (including the provision of such services through
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 3 is received ; or (b) make available technical knowledge,
experience, skill, know-how or processes, which enables the person acquiring
the services to apply the technology contained therein ; or (c) consist of the development and transfer of a
technical plan or technical design, but excludes any service that does not
enable the person acquiring the service to apply the technology contained
therein. For the
purposes of (b) and (c) above, the person acquiring the service
shall be deemed to include an agent, nominee, or transferee of such person. 5.
Notwithstanding paragraph 4, fees for technical services does not include
payments : (a) for services that are ancillary and
subsidiary, as well as inextricably and essentially linked, to the sale of
property other than a sale described in paragraph 3(a) ; (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; (e) to an employee of the person making the
payments or to any individual or firm of individuals (other than a company) for
professional services as defined in Article 14 ; (f) for services rendered in connection with an
installation or structure used for the exploration or exploitation of natural
resources referred to in paragraph 2(j) of Article 5 ; (g) for services referred to in paragraphs 4 and 5
of Article 5. 6. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
royalties or fees for technical services, being a resident of a Contracting
State, carries on business in the other Contracting State in which the
royalties or fees for technical services arise, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the right, property
or contract in respect of which the royalties or fees for technical services
are paid is effectively connected with such permanent establishment or fixed
base. In such case, the provisions of Article 7 or Article 14, as the case may
be, shall apply. 7.
Royalties and fees for technical services shall be deemed to arise in a
Contracting State when the payer is that State itself, a political
sub-division, a local authority, a statutory body or a resident of that State.
Where, however, the person paying the royalties or fees for technical services,
whether he is a resident of a Contracting State or not, has in a Contracting
State a permanent establishment or a fixed base in connection with which the
liability to pay the royalties or fees for technical services was incurred, and
such royalties or fees for technical services are borne by such permanent
establishment or fixed base, then such royalties or fees for technical services
shall be deemed to arise in the State in which the permanent establishment or
fixed base is situated. 8. Where,
by reason of a special relationship between the payer and the beneficial owner
or between both of them and some other person, the amount of royalties or fees
for technical services paid exceeds the amount which would have been paid in
the absence of such relationship, the provisions of this Article shall apply
only to the last-mentioned amount. In such case, the excess part of the
payments shall remain taxable according to the laws of each Contracting State,
due regard being had to the other provisions of this Agreement. ARTICLE
13 : Capital gains - 1. Gains derived by a resident of a Contracting
State from the alienation of immovable property, referred to in Article 6, and
situated in the other Contracting State may 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.
1a[4. Gains derived by a resident of a Contracting State
from the alienation of any property other than those mentioned in paragraphs 1,
2 and 3 of this Article shall be taxable only in that State.] ARTICLE
14 : Independent personal services - 1. Income derived by an
individual who is a resident of a Contracting State from the performance of
professional services or other independent activities of a similar character
shall be taxable only in that State except in the following circumstances when
such income may also be taxed in the other Contracting State : (a) if he has a fixed base regularly available to
him in the other Contracting State for the purpose of performing his
activities; in that case, only so much of the income as is attributable to
that fixed base may be taxed in that other State ; or (b) if his stay in the other Contracting State is
for a period or periods amounting to or exceeding in the aggregate 90 days in
the relevant fiscal year, 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
15 : Dependent personal services - 1. Subject to the provisions of
Articles 16, 18, 19, 20 and 21, salaries, wages and other similar remuneration
derived by a resident of a Contracting State in respect of an employment shall
be taxable only in that State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such remuneration as is
derived therefrom may be taxed in that other State. 2.
Notwithstanding the provisions of paragraph 1, remuneration derived by a
resident of a Contracting State in respect of an employment exercised in the
other Contracting State shall be taxable only in the first-mentioned State, if
: (a) the recipient is present in the other State
for a period or periods not exceeding in the aggregate 183 days in the relevant
fiscal year ; and (b) the remuneration is paid by, or on behalf of,
an employer who is not a resident of the other State ; and (c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the other State. 3. In the
case of a recipient who satisfies all the conditions under sub-paragraphs (a),
(b) and (c) of paragraph 2, if his remuneration is deductible as
an expense against fees for technical services (dealt with under Article 12)
derived by his employer and the employer has no permanent establishment in the
other Contracting State, the remuneration may, notwithstanding the provisions
of paragraph 2, be taxed in that State. In such case, the tax so charged shall
not exceed 15 per cent of the gross amount of the remuneration. 4.
Notwithstanding the preceding provisions of this Article, remuneration derived
in respect of an employment exercised aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting State shall be taxable
only in that State. ARTICLE
16 : Directors fees - Directors fees and similar payments derived
by a resident of a Contracting State in his capacity as a member of the board
of directors of a company which is a resident of the other Contracting State
may be taxed in that other State. ARTICLE
17 : Artistes and sportspersons -1. Notwithstanding the provisions
of Articles 14 and 15, income derived by a resident of a Contracting State as
an artiste such as a theatre, motion picture, radio or television artiste or a
musician or as a sportsperson, from his personal activities as such exercised
in the other Contracting State may be taxed in that other State. 2. Where
income in respect of or in connection with personal activities exercised by an
artiste or a sportsperon accrues not to the artiste or sportsperson himself but
to another person, that income may, notwithstanding the provisions of Articles
7, 14 and 15, be taxed in the Contracting State in which the activities of the
artistes or sportspersons are exercised. 3.
Notwithstanding the provisions of paragraph 1, income derived by an artiste or
a sportsperson 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 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, local authorities or statutory
bodies. 4.
Notwithstanding the provisions of paragraph 2 and Articles 7, 14 and 15, where
income in respect of or in connection with personal activities exercised by an
artiste or a sportsperson in a Contracting State accrues not to the artiste or
sportsperson himself but to another person, that income shall be taxable only
in the other Contracting State, if that other person is supported wholly or
substantially from the public funds of that other State, including any of its
political sub-divisions, local authorities or statutory bodies. ARTICLE
18 : Remuneration and pensions in respect of Government service - 1.
(a) Remuneration, other than a pension, paid by a Contracting State or a
political sub-division, a local authority or a statutory body thereof to an
individual in respect of services rendered to that State or sub-division or
authority or body shall be taxable only in that State. (b)
However, such remuneration shall be taxable only in the other Contracting State
if the services are rendered in that other State and the individual is a
resident of that State who : (i) is a national of that State ; or (ii) did not become a resident of that State solely
for the purpose of rendering the services. 2. (a)
Any pension paid by, or out of funds created by a Contracting State or a
political sub-division, a local authority or a statutory body thereof to an
individual in respect of services rendered to that State or sub-division or
authority or body shall be taxable only in that State. (b)
However, such pension shall be taxable only in the other Contracting State if
the individual is a resident of, and a national of that other State. 3. The
provisions of Articles 15, 16 and 19 shall apply to remuneration and pensions
in respect of services rendered in connection with a business carried on by a
Contracting State or a political sub-division or a local authority or a
statutory body thereof. ARTICLE
19 : Non-Government pensions and annuities - 1. Any pension, other
than a pension referred to in Article 18, or any annuity derived by a resident
of a Contracting State from sources within the other Contracting State may be
taxed only in the first-mentioned 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
20 : Students and trainees - 1. An individual who is or was a
resident of a Contracting State immediately before making a visit to the other
Contracting State and is temporarily present in the other State solely : (a) as a student at a recognised university,
college, school or other similar recognised educational institution in that
other State ; (b) as a business or technical apprentice ; or (c) as a recipient of a grant, allowance or award
for the primary purpose of study, research or training from the Government of
either State or from a scientific, educational, religious or charitable
organisation or under a technical assistance programme entered into by the
Government of either State ;
shall be exempt from tax in that other State on
: (i) all remittances from abroad for the purposes
of his maintenance, education, study, research or training ; (ii) the amount of such grant, allowance or award;
and (iii) any remuneration not exceeding United States
Dollars five hundred per month or its equivalent in local currency in respect
of services in that other State provided the services are performed in
connection with his study, research or training or are necessary for the
purposes of his maintenance. 2. The
benefits of this Article shall extend only for such period of time as may be
reasonable or customarily required to complete the education or training
undertaken, but in no event shall any individual have the benefits of this
Article for more than five consecutive years from the date of his first arrival
in that other Contracting State. ARTICLE
21 : Teachers and researchers - 1. An individual who is or was a
resident of a Contracting State immediately before making a visit to the other
Contracting State, and who, at the invitation of any university, college,
school or other similar educational institution, visits that other State for a
period not exceeding two years solely for the purpose of teaching or research
or both at such educational institution shall be exempt from tax in that other
State on any remuneration for such teaching or research. 2. This
Article shall not apply to income from research if such research is undertaken
primarily for the private benefit of a specific person or persons. ARTICLE
22 : Income of Government - 1. The Government of a Contracting
State shall be exempt from tax in the other Contracting State in respect of
income derived by that Government from sources within the other State. 2. The
types of income to which paragraph 1 applies are: (a) dividends under Article 10 ; (b) interest under Article 11 ; and (c) any other income or gains derived from
transactions not pursuant to the conduct of commercial activities. 3. For
the purposes of paragraph 1, the term Government : (a) in the case of Singapore means the Government
of Singapore and shall include : (i) the Monetary Authority of Singapore and the
Board of Commissioners of Currency; (ii) the Government of Singapore Investment
Corporation Pvt. Ltd. to the extent it is not engaged in the conduct of
commercial activities ; (iii) a statutory
body not engaged in the conduct of commercial activities ; (iv) any other institution or body as may be agreed
from time to time between the competent authorities of the Contracting States ; (b)
in the case of India means the Government of India and shall include : (i) the Governments of the States and the Union
Territories of India; (ii) the Reserve Bank of India or any of its
subsidiaries which is not engaged in the conduct of commercial activities; (iii) a statutory body not engaged in the conduct of
commercial activities; (iv) any other institution or body as may be agreed
from time to time between the competent authorities of the Contracting States. ARTICLE
23 : Income not expressly mentioned - Items of income which are not
expressly mentioned in the foregoing Articles of this Agreement may be taxed in
accordance with the taxation laws of the respective Contracting States. ARTICLE
24 : Limitation of relief - 1. Where this Agreement provides (with
or without other conditions) that income from sources in a Contracting State
shall be exempt from tax, or taxed at a reduced rate in that Contracting State
and under the laws in force in the other Contracting State the said income is
subject to tax by reference to the amount thereof which is remitted to or
received in that other Contracting State and not by reference to the full
amount thereof, then the exemption or reduction of tax to be allowed under this
Agreement in the first-mentioned Contracting State shall apply to so much of
the income as is remitted to or received in that other Contracting State. 2. However, this limitation does not apply to income
derived by the Government of a Contracting State or any person approved by the
competent authority of that State for the purpose of this paragraph. The term
Government includes its agencies and statutory bodies. ARTICLE
25 : Avoidance of double taxation - 1. The laws in force in either of
the Contracting States shall continue to govern the taxation of income in the
respective Contracting States except where express provision to the contrary is
made in this Agreement. 2. Where
a resident of India derives income which, in accordance with the provisions of
this Agreement, may be taxed in Singapore, India shall allow as a deduction
from the tax on the income of that resident an amount equal to the Singapore
tax paid, whether directly or by deduction. Where the income is a dividend paid
by a company which is a resident of Singapore to a company which is a resident
of India and which owns directly or indirectly not less than 25 per cent of the
share capital of the company paying the dividend, the deduction shall take into
account the Singapore tax paid in respect of the profits out of which the
dividend is paid. Such deduction in either case shall not, however, exceed that
part of the tax (as computed before the deduction is given) which is
attributable to the income which may be taxed in Singapore. 3. For
the purposes of paragraph 2 of this Article, Singapore tax paid shall be
deemed to include any amount of tax which would have been payable but for the
reduction or exemption of Singapore tax granted under : (a) the
provisions of the Economic Expansion Incentives (Relief from Income-tax) Act
and the provisions of sections 13(1)(t), 13(1)(u), 13(1)(v),
13(2), 13A, 13B, 13F, 14B, 14E, 43A, 43C, 43D, 43E, 43F, 43G, 43H, 43-I, 43J
and 43K of the Income-tax Act, insofar as they were in force and have not been
modified since the date of signature of this Agreement, or have been modified
in minor respects so as not to affect their general character. (b) any other provision which may subsequently be
enacted granting an exemption or reduction of tax which is agreed by the
competent authorities of the Contracting States to be of a substantially
similar character to any provision referred to in sub-paragraph (a) of
this paragraph, if such provision has not been modified thereafter or has been
modified only in minor respects so as not to affect its general character. 4.
Subject to the provisions of the laws of Singapore regarding the allowance as a
credit against Singapore tax of tax paid in any country other than Singapore,
Indian tax paid, whether directly or by deduction, in respect of income from
sources within India shall be allowed as a credit against Singapore tax payable
in respect of that income. Where such income is a dividend paid by a company
which is a resident of India to a resident of Singapore which owns not less
than 25 per cent of the share capital of the company paying the dividends, the
credit shall take into account Indian tax paid in respect of its profits by the
company paying the dividends. 5. For
the purposes of paragraph 4 of this Article the term Indian tax paid shall be
deemed to include any amount of tax which would have been payable in India but
for a deduction allowed in computing the taxable income or an exemption or
reduction of tax granted for that year in question : (a) Sections 10(4), 10(4B), 10(5B),
10(15)(iv), 10A, 10B, 33AB, 80-I and 80-IA, insofar as these
provisions were in force and have not been modified since the date of signature
of this Agreement, or have been modified only in minor respects so as not to affect
their general character, (b) any other provision which may subsequently be
enacted granting an exemption or
reduction of tax which is agreed by the competent authorities of the
Contracting States to be of a substantially similar character to a provision
referred to in sub-paragraph (a) of this paragraph, if such provision
has not been modified thereafter or has been modified only in minor respects so
as not to affect its general character. 6. Income
which, in accordance with the provisions of this Agreement, is not to be
subjected to tax in a Contracting State, may be taken into account for
calculating the rate of tax to be imposed in that Contracting State. ARTICLE 26 : 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. This provision shall not be construed as preventing a Contracting
State from charging the profits of a permanent establishment which an
enterprise of the other Contracting State has in the first-mentioned State at a
rate of tax which is higher than that imposed on the profits of a similar
enterprise of the first-mentioned Contracting State, nor as being in conflict
with the provisions of paragraph 3 of Article 7 of this Agreement. 3.
Enterprises of a Contracting State, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the
other Contracting State, shall not be subjected in the first-mentioned State to
any taxation or any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to which other similar
enterprises of that first-mentioned State are or may be subjected in the same
circumstances and under the same conditions. 4.
Nothing contained in paragraphs 1, 2 and 3 of this Article shall be construed
as (a) obliging a Contracting State to grant to
residents of the other Contracting State any personal allowances, reliefs,
reductions and deductions which it grants to its own residents; (b) affecting any provisions of the tax laws of
the respective Contracting States regarding the imposition of tax on
non-resident persons as such; (c) obliging a Contracting State to grant to
nationals of the other Contracting State those personal allowances, reliefs,
reductions and deductions for tax purposes which it grants to its own citizens
who are not resident in that State or to such other persons as may be specified
in the taxation laws of that State; and (d) affecting any provisions of the tax laws of
the respective Contracting States regarding any tax concessions granted to
persons fulfilling specified conditions. 5. In
this Article, the term taxation means taxes which are the subject of this
Agreement. ARTICLE
27 : Mutual agreement procedure - 1. Where a resident of a
Contracting State considers that the actions of one or both of the Contracting
States result or will result for him in taxation not in accordance with this
Agreement, he may, notwithstanding the remedies provided by the national laws
of those States, present his case to the competent authority of the Contracting
State of which he is a resident. This case must be presented within three years
of the date of receipt of notice of the action which gives rise to taxation not
in accordance with the Agreement. 2. The
competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at an appropriate solution, to
resolve the case by mutual agreement with the competent authority of the other
Contracting State, with a view to 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
28 : Exchange of information - 1. The competent authorities
of the Contracting States shall exchange such information (including
documents) as is necessary for carrying out the provisions of this Agreement or
of the domestic laws of the Contracting States concerning taxes covered by the
Agreement, 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. 2. The
exchange of information or documents shall be either on a routine basis or on
request with reference to particular cases or both. 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
29 : Diplomatic and consular officials - Nothing in this Agreement
shall affect the fiscal privileges of diplomatic or consular officials under
the general rules of international law or under the provisions of special
agreements. ARTICLE
30 : Entry into force - 1. Each of the Contracting States
shall notify the other the completion of the procedures requires 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
fiscal year beginning on or after the first day of April, 1994; (b) in Singapore, in respect of income arising in
any fiscal year beginning on or after the first day of January, 1994. 2. The
Agreement between the Government of the Republic of India and the Government of
the Republic of Singapore for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income signed in
Singapore on 20th April, 1981 shall terminate and cease to be effective from the
date on which this Agreement comes into effect. 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
fiscal year beginning on or after the 1st day of April next following the date
on which the notice of termination is given; (b) in Singapore, in respect of income arising in
any fiscal year beginning on or after the 1st day of January next following the
date on 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 India this twenty-fourth day of January, one thousand nine hundred
and ninety-four in the Hindi and English languages, both texts being equally
authentic. In the case of divergence between the two texts, the English text
shall be the operative one. ** ** ** Judicial Analysis n Income from Singapore cannot be subjected
to tax in India where same is in accordance with the agreement for avoidance of
double taxation of incomeCIT v. S.R.M. Meyyappan Karalkudi 1995
Tax LR 42 (Mad.). n See also Advance Ruling A No. P-11 of 1995, In re [1997]
94 Taxman 152.
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