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Turkmenistan
51.
Agreement
for avoidance of double taxation and the prevention of fiscal evasion with
Turkmenistan Whereas the annexed Convention between the Government of the Republic of India and the Government of Turkmenistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital has entered into force on the seventh day of July, 1997 after the notification by the Contracting States to each other of the completion of procedures required by its law for bringing into force of the said Convention in accordance with Article 30 of the said Convention ; Now,
therefore, in exercise of the powers conferred by section 90 of the Income-tax
Act, 1961 (43 of 1961) and section 44A of the Wealth-tax Act, 1957 (27 of
1957), the Central Government hereby directs that all the provisions of the
said Convention shall be given effect to in the Union of India.
Notification :
No.
GSR 567 (E), dated 25-9-1997. ANNEXURE
Convention between the
Government of Republic of India The
Government of the Republic of India and the Government of Turkmenistan desiring
to conclude a Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income and on capital and
with a view to promoting economic co-operation between the two countries. Have
agreed as follows : Article 1 : Personal scope - This
Convention shall apply to persons who are residents of one or both of the
Contracting States. Article 2 : Taxes covered - 1.
This Convention shall apply to taxes on income and on capital imposed on behalf
of a Contracting State or of its political sub-divisions or local authorities,
irrespective of the manner in which they are levied. 2. There shall
be regarded as taxes on income and on capital all taxes imposed on total
income, on total capital, or on elements of income or of capital, including
taxes on gains from the alienation of
movable or immovable property, taxes on the total amounts of wages or salaries
paid by enterprises, as well as taxes on capital appreciation. 3. The
taxes to which the Convention shall apply are in particular : (a) In Turkmenistan : (i) the profits (income) tax ; (ii) the personal income-tax from the individuals ; (iii) the tax on natural resources ; (iv) the tax on the property of the enterprises ; (v) the payment for the lands ; (hereinafter
referred to as Turkmen tax) ; (b) In India : (i) the income-tax including any surcharge
thereon ; (ii) the wealth-tax ; (hereinafter
referred to as Indian tax). 4. The
Convention shall apply also to any identical or substantially similar taxes
which are imposed after the date of signature of the Convention in addition
to, or in place of, the taxes referred to in paragraph 3. The competent
authorities of the Contracting States shall notify each other of significant
changes which have been made in their respective taxation laws. Article 3 : General definitions - 1.
For the purposes of this Convention, unless the context otherwise requires : (a) the term Turkmenistan means Turkmenistan
and, when used in a geographical sense, includes any area beyond the territorial
waters of Turkmenistan which in accordance with international law and the laws of Turkmenistan is an area
within which Turkmenistan may exercise rights with respect to the sea bed and
subsoil and their natural resources; (b) the term India meansthe territory of India
and includes the territorial sea and airspace above it, and other maritime
zones in which India has sovereign rights, other rights and jurisdiction,
according to the Indian law and in accordance with international law, including
the UN Convention on the law of the Sea; (c) 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; (d) the term company means any body corporate or
any entity which is treated as a body corporate for tax purposes; (e) the terms enterprise of a Contracting State
and enterprise of the other Contracting State mean respectively an enterprise
carried on by a resident of a Contracting State and an enterprise carried on by
a resident of the other Contracting State; (f) the term international traffic means any
transport by a ship or aircraft operated by an enterprise of a Contracting
State, except when the ship or aircraft is operated solely between places in
the other Contracting State; (g) the term competent authority means : (i) in Turkmenistan, the Head of the Main State
Tax Inspectorate or his authorised representative; (ii) in India, the Central Government in the
Ministry of Finance (Department of Revenue) or their authorised representative; (h) the term national means : (i) any individual possessing the nationality of
a Contracting State; (ii) any legal person, partnership or association
deriving its status as such from the laws in force in a Contracting State; (i) the term fiscal year means : (i) in the case of Turkmenistan, the calendar
year from 1st of January to 31st of December of the year under review; (ii) in the case of India, the previous year as
defined under section 3 of the Income-tax Act, 1961; (j) the term tax means Indian tax or Turkmen tax
as the context requires, but shall not include any amount which is payable in
respect of any default or omission in relation to the taxes to which this
Convention applies or which represents a penalty imposed relating to those
taxes. 2. As
regards the application of the Convention by a Contracting State, any term not
defined therein shall, unless the context otherwise requires, have the meaning
which it has under the law of that State concerning the taxes to which the
Convention applies. Article 4 : Resident - 1.
For the purposes of this Convention, the term resident of a Contracting State
means any person who, under the laws of that State, is liable to tax therein by
reason of his domicile, residence, place of management or any other criterion
of a similar nature. But this term does not include any person who is liable to
tax in that State in respect only of income from sources in that State or
capital situated therein. 2. Where
by reason of the provisions of paragraph 1, an individual is a resident of both
Contracting States, then his status shall be determined as follows : (a) he shall be deemed to be a resident of the
State in which he has a permanent home available to him; if he has a permanent
home available to him in both States, he shall be deemed to be a resident of
the State with which his personal and economic relations are closer (centre of
vital interests); (b) if the State in which he has his centre of
vital interests cannot be determined, or if he has not a permanent home
available to him in either State, he shall be deemed to be a resident of the
State in which he has an habitual abode; (c) if he has an habitual abode in both States or
in neither of them, he shall be deemed to be a resident of the State of which
he is a national; (d) if he is a national of both States or of
neither of them, the competent authorities of the Contracting States shall
settle the question by mutual agreement. 3. Where
by reason of the provisions of paragraph 1, a person other than an individual
is a resident of both Contracting States, then it shall be deemed to be a
resident of the State in which its place of effective management is situated. Article 5 : Permanent establishment -
1. For the purposes of this Convention, the term permanent
establishment means a fixed place of business through which the business of an
enterprise is wholly or partly carried on. 2. The
term permanent establishment includes especially : (a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop; (f) a mine, an oil or gas well, a quarry or any
other place of extraction of natural resources; (g) sales outlet; (h) warehouse in relation to a person providing
storage facilities for others. 3. The
term permanent establishment likewise encompasses a building site, a
construction, assembly or installation project or supervisory activities in
connection therewith, but only when such site, project, or activities continue
for a period of more than six months. 4.
Notwithstanding the preceding provisions of this Article, the term permanent
establishment shall be deemed not to include: (a) the use of facilities solely for the purpose
of storage or display of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of storage or
display; (c) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of processing by
another enterprise; (d) the maintenance of a fixed place of business
solely for the purpose of purchasing goods or merchandise or of collecting
information, for the enterprise; (e) the maintenance of a fixed place of business
solely for the purpose of carrying on, for the enterprise, any other activity
of a preparatory or auxiliary character; (f) the maintenance of a fixed place of business
solely for any combination of activities mentioned in sub-paragraphs (a)
to (e), provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory or auxiliary
character. 5.
Notwithstanding the provisions of paragraphs 1 and 2, where a person - other
than an agent of an independent status to whom paragraph 7 applies - is acting
in a Contracting State on behalf of an enterprise of the other Contracting
State, that enterprise shall be deemed to have a permanent establishment in the
first mentioned Contracting State in respect of any activities which that
person undertakes for the enterprise, if such a person: (a) has and habitually exercises in that State an
authority to conclude contracts in the name of the enterprise, unless the
activities of such person are limited to those mentioned in paragraph 4 which,
if exercised through a fixed place of business, would not make this fixed
place of business a permanent establishment under the provisions of that
paragraph; or (b) has no such authority, but habitually
maintains in the first-mentioned State a stock of goods or merchandise from
which he regularly delivers goods or merchandise on behalf of the enterprise. 6.
Notwithstanding the preceding provisions of this Article, an insurance
enterprise of a Contracting State shall, except in regard to re-insurance, be
deemed to have a permanent establishment in the other Contracting State if it
collects premiums in the territory of that other State or insures risks
situated therein through a person other than an agent of an independent status
to whom paragraph 7 applies. 7. An
enterprise shall not be deemed to have a permanent establishment in a
Contracting State merely because it carries on business in that State through a
broker, general commission agent or any other agent of an independent status,
provided that such persons are acting in the ordinary course of their business.
However, when the activities of such an agent are devoted wholly or almost
wholly on behalf of that enterprise, he will not be considered an agent of an
independent status within the meaning of this paragraph. 8. The
fact that a company which is a resident of a Contracting State controls or is
controlled by a company which is a resident of the other Contracting State, or
which carries on business in that other State (whether through a permanent
establishment or otherwise), shall not of itself constitute either company a
permanent establishment of the other. Article 6 : Income from immovable
property - 1. Income derived by a resident of a Contracting State
from immovable property (including income from agriculture or forestry)
situated in the other Contracting State may also be taxed in that other State. 2. The
term immovable property shall have the meaning which it has under the law of
the Contracting State in which the property in question is situated. The term
shall in any case include property accessory to immovable property, livestock
and equipment used in agriculture and forestry, rights to which the provisions
of general law respecting landed property apply, usufruct of immovable property
and rights to variable or fixed payments as consideration for the working of,
or the right to work, mineral deposits, sources and other natural resources;
ships and aircraft shall not be regarded as immovable property. 3. The
provisions of paragraph 1 shall apply to income derived from the direct use,
letting, or use in any other form of immovable property. 4. The
provisions of paragraphs 1 and 3 shall also apply to the income from immovable
property of an enterprise and to income from immovable property used for the
performance of independent personal services. Article 7 : Business profits - 1.
The profits of an enterprise of a Contracting State shall be taxable only in
that State unless the enterprise carries on business in the other Contracting
State through a permanent establishment situated therein. If the enterprise
carries on business as aforesaid, the profits of the enterprise may be taxed
in the other State but only so much of them as is attributable to that
permanent establishment. 2. Subject
to the provisions of paragraph 3, where an enterprise of a Contracting State
carries on business in the other Contracting State through a permanent
establishment situated therein, there shall in each Contracting State be
attributed to that permanent establishment the profits which it might be
expected to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions and dealing
wholly independently with the enterprise of which it is a permanent
establishment. 3. In
determining the profits of a permanent establishment, there shall be allowed as
deductions expenses which are incurred for the purposes of the permanent
establishment, including executive and general administrative expenses so
incurred, 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 tax laws of that State. 4. No
profits shall be attributed to a permanent establishment by reason of the mere
purchase by that permanent establishment of goods or merchandise for the
enterprise. 5. For
the purposes of the preceding paragraphs, the profits to be attributed to the
permanent establishment shall be determined by the same method year by year
unless there is good and sufficient reason to the contrary. 6. Where
profits include items of income which are dealt with separately in other
Articles of this Convention, then the provisions of those Articles shall not
be affected by the provisions of this Article. Article 8 : Shipping and air transport
- 1. Profits derived by an enterprise of a Contracting State from
the operation of ships or aircraft in international traffic shall be taxable
only in that State. 2.
Profits derived by a transportation enterprise which is a resident of a
Contracting State from the use, maintenance, or rental of containers (including
trailers and other equipment for the transport of containers) used for the
transport of goods or merchandise in international traffic shall be taxable
only in that Contracting State unless the containers are used solely within the
other Contracting State. 3. The
provisions of paragraph 1 shall also apply to profits from the participation in
a pool, a joint business or an international operating agency. Article 9 : Associated
enterprises - 1. Where, (a) an enterprise of a Contracting State
participates directly or indirectly in the management, control or capital of an
enterprise of the other Contracting State, or (b) the same persons participate directly or
indirectly in the management, control or capital of an enterprise of a Contracting
State and an enterprise of the other Contracting State, and in
either case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made
between independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of those
conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly. 2. Where
a Contracting State includes in the profits of an enterprise of that State -
and taxes accordingly - profits on which an enterprise of the other Contracting
State has been charged to tax in that other State and the profits so included
are profits which would have accrued to the enterprise of the first-mentioned
State if the conditions made between the two enterprises had been those which
would have been made between independent enterprises, then that other State
shall make an appropriate adjustment to the amount of the tax charged therein
on those profits. In determining such adjustment, due regard shall be had to
the other provisions of this Convention and the competent authorities of the
Contracting States shall if necessary consult each other. Article 10 : Dividends - 1.
Dividends paid by a company which is a resident of a Contracting State to a
resident of the other Contracting State may be taxed in that other State. 2.
However, such dividends may also be taxed in the Contracting State of which the
company paying the dividends is a resident and according to the laws of that
State, but if the recipient is the beneficial owner of the dividends the tax so
charged shall not exceed 10 per cent of the gross amount of the dividends. The
competent authorities of the Contracting States shall by mutual agreement
settle the mode of application of this limitation. This paragraph shall not
affect the taxation of the company in respect of the profits out of which the
dividends are paid. 3. The
term dividends as used in this Article means income from shares or other
rights, not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as
income from shares by the laws of the State of which the company making the
distribution is a resident. 4. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
dividends, being a resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the dividends is a
resident, through a permanent establishment situated therein, or performs in
that other State independent personal services from a fixed base situated
therein, and the holding in respect of which the dividends are paid is
effectively connected with such permanent establishment or fixed base. In such
case the provisions of Article 7 or Article 14, as the case may be, shall
apply. 5. Where
a company which is a resident of a Contracting State derives profits or income
from the other Contracting State, that other State may not impose any tax on
the dividends paid by the company, except insofar as such dividends are paid to
a resident of that other State or insofar as the holding in respect of which
the dividends are paid is effectively connected with a permanent establishment
or a fixed base situated in that other State, nor subject the companys
undistributed profits to a tax on the companys undistributed profits, even if
the dividends paid or the undistributed profits consist wholly or partly of
profits or income arising in such other State. Article 11 : Interest - 1.
Interest arising in a Contracting State and paid to a resident of the other
Contracting State may be taxed in that other State. 2.
However, such interest may also be taxed in the Contracting State in which it
arises and according to the laws of that State, but if the recipient is the
beneficial owner of the interest the tax so charged shall not exceed 10 per
cent of the gross amount of the interest. The competent authorities of the
Contracting States shall by mutual agreement settle the mode of application of
this limitation. 3.
Notwithstanding the provisions of paragraph 2, interest arising in a
Contracting State shall be exempt from tax in that State provided it is derived
and beneficially owned by: (i) the Government, a political sub-division or a
local authority of the other Contracting State; or (ii) the Central Bank of the other Contracting
State, or any other bank that may be mutually agreed upon between the two
Contracting States. 4. The
term interest as used in this Article means income from debt-claims of every
kind, whether or not secured by mortgage and whether or not carrying 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 14, as the case may be, shall apply. 6. Interest
shall be deemed to arise in a Contracting State when the payer is that State
itself, a political sub-division, a local authority or a resident of that
State. Where, however, the person paying the interest, whether he is a resident
of a Contracting State or not has in a Contracting State a permanent
establishment or a fixed base in connection with which the indebtedness on
which the interest is paid was incurred, and such interest is borne by such
permanent establishment or fixed base, then such interest shall be deemed to
arise in the State in which the permanent establishment or fixed base is
situated. 7. Where,
by reason of a special relationship between the payer and the beneficial owner
or between both of them and some other person, the amount of the interest,
having regard to the debt-claim for which it is paid, exceeds the amount which
would have been agreed upon by the payer and the beneficial owner in the
absence of such relationship, the provisions of this Article shall apply only
to the last mentioned amount. In such case, the excess part of the payments
shall remain taxable according to the laws of each Contracting State, due
regard being had to the other provisions of this Convention. Article 12 : Royalties and fees for
technical services - 1. Royalties or fees for technical services
arising in a Contracting State and paid to a resident of the other Contracting
State may be taxed in that other State. 2.
However, such royalties or fees for technical services may also be taxed in the
Contracting State in which they arise and according to the laws of that State,
but if the recipient is the beneficial owner of the royalties or fees for
technical services the tax so charged shall not exceed 10 per cent of the gross
amount of the royalties or fees for technical services. 3. (a)
The term royalties as used in this Article means payments of any kind
received as a consideration for the use of, or the right to use, any copyright
of literary, artistic or scientific work including cinematograph films, or
recordings on any means of reproduction for use in connection with radio or
television broadcasting, computer software, any patent, trade mark, design or
model, plan, secret formula or process, or for the use of, or the right to use,
industrial, commercial or scientific equipment, or for information concerning
industrial, commercial or scientific experience; (b)
The term fees for technical services means payments of any kind in
consideration for the rendering of any managerial, technical or consultancy
services including the provision of services by technical or other personnel
but does not include payments for services mentioned in Articles 14 and 15 of
this Convention. 4. The
provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the
royalties or fees for technical services, being a resident of a Contracting
State, carries on business in the other Contracting State in which the
royalties or fees for technical services arise, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the right or property
in respect of which the royalties or fees for technical services are paid is
effectively connected with such permanent establishment or fixed base. In such
case the provisions of Article 7 or Article 14, as the case may be, shall
apply. 5.
Royalties or fees for technical services shall be deemed to arise in a
Contracting State when the payer is that State itself, a political
sub-division, or 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 any State a permanent
establishment or a fixed base in connection with which the liability to pay the
royalties or fees for technical services was incurred, and such royalties or
fees for technical services are borne by such permanent establishment or fixed
base, then such royalties or fees for technical services shall be deemed to
arise in the State in which the permanent establishment or fixed base is
situated. 6. Where,
by reason of a special relationship between the payer and the beneficial owner
or between both of them and some other person, the amount of the royalties or
fees for technical services, having regard to the use, right or information
for which they are paid, exceeds the amount which would have been agreed upon
by the payer and the beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned amount. In
such case, the excess part of the payments shall remain taxable according to
the laws of each Contracting State, due regard being had to the other
provisions of this Convention. Article 13 : Capital gains - 1.
Gains derived by a resident of a Contracting State from the alienation of
immovable property referred to in Article 6 and situated in the other
Contracting State may be taxed in that other State. 2. Gains
from the alienation of movable property forming part of the business property
of a permanent establishment which an enterprise of a Contracting State has in
the other Contracting State or of movable property pertaining to a fixed base
available to a resident of a Contracting State in the other Contracting State
for the purpose of performing independent personal services, including such
gains from the alienation of such a permanent establishment (alone or with the
whole enterprise) or of such fixed base, may be taxed in that other State. 3. Gains
derived by an enterprise of a Contracting State from the alienation of ships or
aircraft operated in international traffic, or movable property pertaining to
the operation of such ships or aircraft shall be taxable only in that State. 4. Gains
from the alienation of shares of the capital stock of a company the property of
which consists directly or indirectly principally of immovable property
situated in a Contracting State may be taxed in that State. 5. Gains
from the alienation of shares other than those mentioned in paragraph 4 in a
company which is a resident of a Contracting State may be taxed in that State. 6. Gains
from the alienation of any property other than that referred to in paragraphs
1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the
alienator is a resident. Article 14 : Independent personal
services - 1. Income derived by a resident of a Contracting State in
respect of professional services or other activities of an independent
character shall be taxable only in that State except in the following
circumstances, when such income may also be taxed in the other Contracting
State: (a) if he has a fixed base regularly available to
him in the other Contracting State for the purpose of performing his
activities; in that case, only so much of the income as is attributable to
that fixed base may be taxed in that other State; or (b) if his stay in the other Contracting State is
for a period or periods aggregating 183 days or more in any 12-month period
commencing or ending in the fiscal year concerned; in that case only so much of
the income as is derived from his activities performed in that other State in
the year may be taxed in that other State. 2. The term
professional services includes especially independent scientific, literary
artistic, educational or teaching activities as well as the independent
activities of physicians, lawyers, engineers, architects, surgeons, dentists
and accountants. Article 15 : Dependent personal
services - 1. Subject to the provisions of Articles 16, 18 and 19,
salaries, wages and other similar remuneration derived by a resident of a
Contracting State in respect of an employment shall be taxable only in that
State unless the employment is exercised in the other Contracting State. If the
employment is so exercised, such remuneration as is derived therefrom may be
taxed in that other State. 2.
Notwithstanding the provisions of paragraph 1, remuneration derived by a
resident of a Contracting State in respect of an employment exercised in the
other Contracting State shall be taxable only in the first-mentioned State if: (a) the recipient is present in the other State
for a period or periods not exceeding in the aggregate 183 days in any 12-month
period commencing or ending in the fiscal year concerned, and (b) the remuneration is paid by, or on behalf of,
an employer who is not a resident of
the other State, and (c) the remuneration is not borne by a permanent establishment
or a fixed base which the employer has in the other State. 3.
Notwithstanding the preceding provisions of this Article, remuneration derived
in respect of an employment exercise aboard a ship or aircraft operated in
international traffic by an enterprise of a Contracting State may be taxed in
that State Article 16 : Directors fees -
Directors fees and other similar payments derived by a resident of a
Contracting State in his capacity as a member of the board of directors of a
company which is a resident of the other Contracting State may be taxed in that
other State. Article 17 : Artistes and sportsmen -
1. Notwithstanding the provisions of Articles 14 and 15, income derived
by a resident of a Contracting State as an entertainer, such as a theatre,
motion picture, radio or television artiste, or a musician, or as a sportsman,
from his personal activities as such exercised in the other Contracting State,
may be taxed in that other State. 2. Where
income in respect of personal activities exercised by an entertainer or a
sportsman in his capacity as such accrues not to the entertainer or sportsman
himself but to another person, that income may, notwithstanding the provisions
of Articles 7, 14 and 15, be taxed in the Contracting State in which the
activities of the entertainer or sportsman are exercised. 3. The
provisions of paragraphs 1 and 2 shall not apply to income derived from
activities performed in a Contracting State by entertainers or sportsmen if the
visit to that State is substantially supported by public funds of one or both
of the Contracting States or of political sub-divisions or local authorities
thereof. In such a case, the income is taxable only in the Contracting State of
which the entertainer or sportsman is a resident. Article 18 : Pensions - Subject to
the provisions of paragraph 2 of Article 19, pensions and other similar
remuneration paid to a resident of a Contracting State in consideration of past
employment shall be taxable only in that State. Article 19 : Government service - 1.
(a) Remuneration, other than a pension, paid by a Contracting State or a
political sub-division or a local authority thereof to an individual in respect
of services rendered to that State or sub-division or authority shall be
taxable only in that State. (b)
However, such remuneration shall be taxable only in the other Contracting State
if the services are rendered in that State and the individual is a resident of
that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely
for the purpose of rendering the services. 2. (a)
Any pension paid by, or out of funds created by, a Contracting State or a
political sub-division or a local authority thereof to an individual in respect
of services rendered to that State or sub-division or authority shall be
taxable only in that State. (b)
However, such pension shall be taxable only in the other Contracting State if
the individual is a resident of, and a national of, that State. 3. The
provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions
in respect of services rendered in connection with a business carried on by a
Contracting State or a political sub-division or a local authority thereof. Article 20 : Students and apprentices -
1. A student or business apprentice who is or was a resident of a
Contracting state immediately before visiting the other Contracting State and
who is present in that other Contracting State solely for the purpose of his
education or training shall be exempt from tax in that other State on: (a) payments made to
him by persons residing outside that other State for the purposes of his
maintenance, education or training; and (b) remuneration from
employment in that other State, in an amount not exceeding US $ 500 or its
equivalent amount during any fiscal year, as the
case may be, provided that such employment is directly related to his studies
or is undertaken for the purpose of his maintenance. 2. The
benefits of this Article shall extend only for such period of time as may be
reasonable or customarily required to complete the education or training
undertaken, but in no event shall any individual have the benefits of this
Article for more than five consecutive years from the date of his first arrival
in that other Contracting State. Article 21 : Professors, teachers and
research scholars - 1. A professor or teacher who is or was a
resident of the Contracting state
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 on any remuneration for such teaching or research for a
period not exceeding two years from the date of his arrival in that other
State. 2. This
Article shall not apply to income from research, if such research is undertaken
primarily for the private benefit of a specific person or persons. 3. For
the purposes of this Article and Article 20, an individual shall be deemed to
be a resident of a Contracting State if he is a resident in that State in the
fiscal year in which he visits the other Contracting State or in the
immediately preceding fiscal year. 4. For
the purposes of paragraph 1, approved institution means an institution which
has been approved in this regard by the competent authority of the concerned
Contracting State. Article 22 : Other income - 1.
Subject to the provisions of paragraph 2, items of income of a resident of a Contracting
State, wherever arising, which are not expressly dealt with in the foregoing
Articles of this Convention, shall be taxable only in that State. 2. The
provisions of paragraph 1 shall not apply to income, other than income from
immovable property as defined in paragraph 2 of Article 6, if the recipient of
such income, being a resident of a Contracting State, carries on business in
the other Contracting state through a permanent establishment situated therein,
or performs in that other State independent personal services from a fixed base
situated therein, and the right or property in respect of which the income is
paid is effectively connected with such permanent establishment or fixed base.
In such case, the provisions of Article 7 or Article 14, as the case may be,
shall apply. 3.
Notwithstanding the provisions of paragraphs 1 and 2, items of income of a
resident of a Contracting State not dealt with in the foregoing Articles of
this Convention and arising in the other Contracting State may also be taxed in
that other State. Article 23 : Capital - 1.
Capital represented by immovable property referred to in Article 6, owned by a
resident of a Contracting State and situated in the other Contracting State,
may be taxed in that other State. 2. Capital
represented by 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 by 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, may be taxed in
that other State. 3.
Capital owned by an enterprise of a Contracting State and represented by ships
and aircraft operated in international traffic, and by movable property
pertaining to the operations of such ships and aircraft, shall be taxable only
in that State. 4. All
other elements of capital of a resident of a Contracting State shall be taxable
only in that State. 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 and capital in the respective
Contracting States, except where provisions to the contrary are made in this Convention. 2. Where
a resident of India derives income or owns capital which, in accordance with
the provisions of this Convention, may be taxed in Turkmenistan, India shall
allow as a deduction from the tax on the income of that resident, an amount
equal to the income-tax paid in Turkmenistan, whether directly or by deduction;
and as a deduction from the tax on the capital of that resident, an amount
equal to the capital tax paid in Turkmenistan. Such deduction in either case
shall not, however, exceed that part of income-tax or tax on capital (as paid
before the deduction is given), which is attributable to the income or the
capital which may be taxed in Turkmenistan. 3. In the
case of Turkmenistan, the double taxation shall be avoided by a method which is
identical to that mentioned in paragraph 2. 4. For
the purposes of paragraphs 2 and 3 of this Article, the tax payable in the
Contracting State shall be deemed to include the tax which would have been
payable but for the tax incentives according to which such tax is not payable
under the laws of the Contracting State and which are designed to promote
economic development. 5. Income
which in accordance with the provisions of this Convention, is not to be
subjected to tax in a Contracting State, may be taken into account for
calculating the rate of tax to be imposed in that Contracting State. Article 25 : Non-discrimination - 1.
Nationals of a Contracting State shall not be subjected in the other
Contracting State to any taxation or any requirement connected therewith, which
is other or more burdensome than the taxation and connected requirements to
which nationals of that other State in the same circumstances, in particular
with respect to residence, are or may be subjected. This provision shall,
notwithstanding the provisions of Article 1, also apply to persons who are not
residents of one or both of the Contracting States. 2. The
taxation on a permanent establishment which an enterprise of a Contracting
State has in the other Contracting State shall not be less favourably levied in
that other State than the taxation levied on enterprises of that other State
carrying on the same activities. This provision shall not be construed as obliging
a Contracting State to grant to residents of the other Contracting State any
personal allowances, reliefs and reductions for taxation purposes on account of
civil status or family responsibilities which it grants to its own residents.
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 Contracting state at a rate
higher than that imposed on the profits of similar enterprise of the first-mentioned
State, nor as being in conflict with the provisions of paragraph 3 of Article 7
of this Convention. 3. Except
where the provisions of paragraph 1 of Article 9, paragraph 6 of Article 11, or
paragraph 6 of Article 12, apply, interest, royalties, fees for technical
services and other disbursements paid by an enterprise of a Contracting State
to a resident of the other Contracting state shall, for the purpose of
determining the taxable profits of such enterprise, be deductible under the
same conditions as if they had been paid to a resident of the first-mentioned
State. 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. 4.
Enterprises of a Contracting State, the capital of which is wholly or partly
owned or controlled, directly or indirectly, by one or more residents of the
other Contracting State, shall not be subjected in the first-mentioned State to
any taxation or any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to which other similar
enterprises of the first mentioned State are or may be subjected. 5. The
provisions of this Article shall, notwithstanding the provisions of Article 2,
apply to taxes of every kind and description. Article 26 : Mutual agreement procedure
- 1. Where a person considers that the actions of one or both of the
Contracting States result or will result for him in taxation not in accordance
with the provisions of this Convention, he may, irrespective of the remedies
provided by the domestic law of those States, present his case to the competent
authority of the Contracting State of which he is a resident or, if his case
comes under paragraph 1 of Article 25, to that of the Contracting State of
which he is a national. The case must be presented within three years from the
first notification of the action resulting in taxation not in accordance with
the provisions of the Convention. 2. The
competent authority shall endeavour, if the objection appears to it to be
justified and if it is not itself able to arrive at a satisfactory solution, to
resolve the case by mutual agreement with the competent authority of the other
Contracting State, with a view to the avoidance of taxation which is not in
accordance with the Convention. Any agreement reached shall be implemented notwithstanding
any time-limits in the domestic law of the Contracting States. 3. The
competent authorities of the Contracting States shall endeavour to resolve by
mutual agreement any difficulties or doubts arising as to the interpretation or
application of the Convention. They may also consult together for the
elimination of double taxation in cases not provided for in the Convention. 4. The
competent authorities of the Contracting States may communicate with each
other directly for the purpose of reaching an agreement in the sense of
the preceding paragraphs. When it seems
advisable in order to reach agreement to have an oral exchange of opinions,
such exchange may take place through a Commission consisting of
representatives of the competent authorities of the Contracting States. Article 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 this Convention or of the domestic laws of the Contracting
States concerning taxes covered by the Convention insofar as the taxation
thereunder is not contrary to the Convention. The exchange of information is
not restricted by Article 1. Any information received by a Contracting State
shall be treated as secret in the same manner as information obtained under the
domestic laws of that State and shall be disclosed only to persons or
authorities (including courts and administrative bodies) involved in the
assessment or collection of, the enforcement or prosecution in respect of, or
the determination of appeals, in relation to, the taxes covered by the
Convention. Such persons or authorities shall use the information only for such
purposes. They may disclose the information in public court proceedings or in
judicial decisions. 2. In no
case shall the provisions of paragraph
1 be construed so as to impose on a Contracting State the obligation : (a) to carry out administrative measures at
variance with the laws and administrative practice of that or of the other
Contracting State; (b) to supply information or documents which are
not obtainable under the laws or in the normal course of the administration
of that or of the other Contracting State; (c) to supply information which would disclose any
trade, business, industrial, commercial or professional secret or trade
process, or information, the disclosure of which would be contrary to public
policy. Article 28 : Collection assistance
- 1. The Contracting States undertake to lend assistance to each other
in the collection of taxes to which this Convention relates, together with
interest, costs and civil penalties relating to such taxes, referred to in this
Article as a revenue claim. 2.
Request for assistance by the competent authority of a Contracting State in
the collection of a revenue claim shall include a certification by such
authority that, under the laws of that State, the revenue claim has been
finally determined. For the purposes of this Article, a revenue claim is finally
determined when a Contracting State has the right under its internal law to
collect the revenue claim and the taxpayer has no further rights to restrain
collection. 3. Amounts collected by the competent authority of a
Contracting State pursuant to this Article shall be forwarded to the competent
authority of the other Contracting State. However, the first-mentioned
Contracting State shall be entitled to reimbursement of costs, if any,
incurred in the course of rendering of such assistance to the extent mutually
agreed between the competent authorities of the two States. 4. Nothing in this Article shall be construed as imposing
on either Contracting State the obligation to carry out administrative
measures of a different nature from those used in the collection of its own
taxes or those which would be contrary to its public policy. Article 29 : Diplomatic agents and
consular officers - Nothing in this Convention shall affect the fiscal
privileges of diplomatic agents or consular officers under the general rules of
international law or under the provisions of special agreements. Article 30 : Entry into force - 1.
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 Convention. This Convention 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 or capital arising in any fiscal year beginning on
or after the first day of April next following the calendar year in which the
Convention enters into force; and (b) in
Turkmenistan, in respect of income or capital arising in any fiscal year
beginning on or after the first day of January next following the calendar year
in which the Convention enters into force. Article 31 : Termination - This
Convention shall remain in force indefinitely until terminated by a Contracting
State. Either Contracting State may terminate the Convention, through diplomatic
channels, by giving notice of termination at least six months before the end of
any calendar year beginning after the expiration of five years from the date
of entry into force of the Convention. In such event, the Convention shall
cease to have effect: (a) in
India, in respect of income arising in any previous year beginning on or after
the 1st April next following the calendar year in which the notice is given in
respect of capital which is held at the expiry of any previous year beginning
on or after the 1st April next following the calendar year in which the notice
of termination is given; (b) in
Turkmenistan, in respect of income arising in any year of income beginning on
or after the 1st January next following the calendar year in which the notice
is given and in respect of capital which is held at the expiry of any year of
income next following the calendar year in which the notice of termination is
given. In witness whereof, the
undersigned, being duly authorised thereto, have signed this Convention. Done in duplicate at New Delhi this
25th day of February, 1997 in the Turkmen, Hindi and English Languages, all
three texts being equally authentic. In case of divergence between the texts,
the English text shall be the operative one.
Protocol At the signing of the Convention between the Government of the Republic of India and the Government of
Turkmenistan for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to taxes on income and on capital, the undersigned have
agreed the following shall form an integral part of the Convention. With reference of Article 7: In respect of paragraphs 1 and 2 of Article 7, where an enterprise of
one of the Contracting States sells
goods or merchandise or carries on business in the other Contracting State
through a permanent establishment situated therein, the profits of that
permanent establishment shall not be determined on the basis of the total
amount received by the enterprise, but shall be determined only on the basis of
the remuneration which is attributed to the actual activity of the permanent
establishment for such sales or business. For instance, in the case of contracts
for the survey, supply, installation or construction of industrial, commercial
or scientific equipment or premises, or of public works, when the enterprise
has a permanent establishment, the profits of such permanent establishment
shall not be determined on the basis of the total amount of the contract, but
shall be determined only on the basis of that part of the contract which is
effectively carried out by the permanent establishment in the Contracting State
where the permanent establishment is situated. IN
WITNESS WHEREOF, the undersigned, being duly authorised thereto, have
signed this Protocol. Done in duplicate at New Delhi this 25th day of
February, 1997 in Turkmen, Hindi and English languages, all texts being equally
authentic. In case of divergence between the texts, the English text shall
prevail.
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