|
|||||
|
|
|||||
|
|||||
|
1.
Agreement for Avoidance of Double Taxation and prevention of fiscal evasion with
Armenia Whereas the
annexed Convention between the Government of the Republic of India and the
Government of the Republic of the Armenia for the avoidance of double taxation
and the prevention of fiscal evasion with respect to taxes on income, has come
into force on the 9th day of September, 2004, on date of the later of the
notifications by both the Contracting States to each other, under Article 30 of
the said Convention, of the completion of the procedures required by their
respective laws for the entry into force of the said Convention: Now,
therefore, in exercise of the powers conferred by section 90 of the Income-tax
Act, 1961 (43 of 1961), the Central Government hereby directs that all the
provisions of the said Convention shall be given effect to in the Union of Notification : No. GSR 800E, dated 8-12-2004. Annexure Convention Between The Government of the Republic of India And The
Government of the Republic of Armenia For the avoidance of double taxation and
The prevention of Fiscal Evasion with respect to Taxes on Income The Government
of the Article 1 : Persons covered - This Convention shall apply to persons who are residents of one or
both of the Contracting States. Article 2 : Taxes covered - 1. This Convention shall apply to taxes on income imposed on
behalf of a 2. There shall be regarded as taxes on income
all taxes imposed on total income, or on elements of income, including taxes on
gains from the alienation of movable or immovable property and taxes on the
total amounts of wages or salaries paid by enterprises. 3. The existing taxes to which the Convention
shall apply are in particular: (a) in (hereinafter referred to as
Indian tax); (b) in (i) the profit tax; (ii) the income-tax; (iii) the land tax; (hereinafter
referred to as the Armenian tax). 4. The Convention shall apply also to any
identical or substantially similar taxes that are imposed after the date of
signature of the Convention in addition to, or in place of, the existing taxes.
The competent authorities of the Contracting States shall notify each other of
any significant changes that have been made in their taxation laws. Article 3 : General Definitions - 1. For the purposes of this
Convention, unless the context otherwise requires : (a) the term India means 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 jurisdiction, according to
the Indian law and in accordance with international law, including the U.N.
Agreement on the Law of the Sea; (b) the term (c) the terms a (d) 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; (e) the term company means any body corporate or any entity that is
treated as a body corporate for tax purposes; (f) the term enterprise applies to the carrying on of any business; (g) the terms enterprise of a Contracting State and enterprise of the
other Contracting State mean respectively an enterprise carried on by a
resident of a Contracting State and an enterprise carried on by a resident of
the other Contracting State; (h) the term international traffic means any transport by a ship or aircraft
operated by an enterprise of a (i) the term competent authority means: (i) in (ii) in (j) the term national, in relation to a (i) any individual possessing the nationality or
citizenship of that (ii) any legal person, partnership or association
deriving its status as such from the laws in force in that (k) the term tax means Indian tax or Armenia 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 or fine imposed relating to those taxes; (l) the term fiscal year means: (i) in the case of (ii) in the case of 2. As regards the application of the Convention
at any time by a Contracting State, any term not defined therein shall, unless
the context otherwise requires, have the meaning that it has at that time under
the law of that State for the purposes of the taxes to which the Convention
applies, any meaning under the applicable tax laws of that State prevailing
over a meaning given to the term under other laws of that State. 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, and also includes that State and
any political sub-division or local authority thereof. This term, however, does
not include any person who is liable to tax in that State in respect only of
income from sources in that State. 2. Where by reason of the provisions of
paragraph 1 and individual is a resident of both Contracting States, then his
status shall be determined as follows: (a) he shall be deemed to be a resident only of the State in which he
has a permanent home available to him; if he has a permanent home available to
him in both States, he shall be deemed to be a resident only of the State with
which his personal and economic relations are closer (centre of vital
interests); (b) if the State in which he has his centre of vital interests cannot
be determined, or if he has not a permanent home available to him in either State,
he shall be deemed to be a resident only of the State in which he has an
habitual abode; (c) if he has an habitual abode in both States or in neither of them,
he shall be deemed to be a resident only of the State of which he is a
national; (d) if he is a national of both States or of neither of them, the
competent authorities of the Contracting States shall settle the question by
mutual agreement. 3. Where by reason of the provisions of
paragraph 1 a person other than an individual is a resident of both Contracting
States, then it shall be deemed to be a resident only of the State in which its
place of effective management is situated. If the State in which its place of
effective management is situated cannot be determined, the competent authorities
of the Contracting States shall settle the question by mutual agreement. 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 sales outlet; (g) a warehouse in relation to a person providing storage facilities
for others; (h) a farm, plantation or other place where agricultural, forestry,
plantation or related activities are carried on; and (i) a mine, an oil or gas well, a quarry or any
other place of exploration or extraction of natural resources. 3. A building site or construction, installation
or assembly project or supervisory activities in connection therewith
constitutes a permanent establishment only if such site, project or activities
last more than 270 days. 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
purposes 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 authority to conclude contracts in the name of the enterprise,
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) habitually secures orders in the first-mentioned State, wholly or almost
wholly for the enterprise itself. 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 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 2. The term immovable property shall have the
meaning which it has under the law of the 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 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 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 tax laws of that
State. However, no
such deduction shall be allowed in respect of amounts, if any, paid (otherwise
than towards reimbursement of actual expenses) by the permanent establishment
to the enterprise, by way of royalties, fees or other similar payments in
return for the use of patents or other rights, or by way of commission, for
services performed or for management, or, except in the case of a banking
enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no
account shall be taken, in determining the profits of a permanent
establishment, for amounts charged (otherwise than towards reimbursement of
actual expenses) by the permanent establishment to the enterprise, by way of
royalties, fees or other similar payments in return for the use of patents or
other rights, or by way of commission for services performed or for management,
or, except in the case of a banking enterprise by way of interest on moneys
lent to the enterprise. 4. Insofar as it has been customary in a
Contracting State to determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total profits of the
enterprise to its various parts, nothing in paragraph 2 shall preclude that
Contracting State from determining the profits to be taxed by such an
apportionment as may be customary, the method of apportionment adopted shall,
however, be such that the result shall be in accordance with the principles
contained in this Article. 5. No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that permanent establishment of
goods or merchandise for the enterprise. 6. For the purposes of the preceding paragraphs,
the profits to be attributed to the permanent establishment shall be determined
by the same method year by year unless there is good and sufficient reason to
the contrary. 7. Where profits include items of income which
are dealt with separately in other Article 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 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 (b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a and in either
case conditions are made or imposed between the two enterprises in their
commercial or financial relations which differ from those which would be made
between independent enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by reason of those
conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly. 2. Where a Contracting State includes in the
profits of an enterprise of that State - and taxes accordingly - profits on
which an enterprise of the other Contracting State has been charged to tax in
that other State and the profits so included are profits which would have
accrued to the enterprise of the first-mentioned State if the conditions made
between the two enterprises had been those which would have been made between
independent enterprises, than that other State shall make 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 2. However, such dividends may also be taxed in
the 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 of 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 2. However, such interest may also be taxed in
the 3. Notwithstanding the provisions of paragraph
2, interest arising in a (a) the Government, a political sub-division or a local authority of
the other (b) (i) in the case of (ii) in the case of (c) any other institution as may be agreed upon from time to time
between the competent authorities of the Contracting States through exchange of
letters. 4. The term interest as used in this Article
means income from debt-claims of every kind, whether or not secured by mortgage
and whether or not carrying a right to participate in the debtors profits, and
in particular, income from Government securities and income from bonds or
debentures, including premiums and prizes attaching to such securities, bonds
or debentures. Penalty charges for late payment shall not be regarded as
interest for the purpose of this Article. 5. The provisions of paragraphs 1 and 2 shall
not apply if the beneficial owner of the interest, being a resident of a Contracting
State, carries on business in the other Contracting State in which the interest
arises, through a permanent establishment situated therein, or performs in that
other State independent personal services from a fixed base situated therein,
and the debt-claim in respect of which the interest is paid is effectively
connected with such permanent establishment or fixed base. In such case, the
provisions of article 7 or article 14, as the case may be, shall apply. 6. Interest shall be deemed to arise in a 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 Article 12 : Royalties and fees
for Technical Services - 1.
Royalties or fees for technical services arising in a 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 beneficial owner of the
royalties or fees for technical services is a resident of the other Contracting
State 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 films or tapes used for television or radio
broadcasting, 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 as used in this Article means payments of
any kind, other than those mentioned in articles 14 and 15 of this Convention
as consideration for managerial or technical or consultancy services, including
the provision of services of technical or other personnel. 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 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 Article 13 : Capital Gains - 1. Gains derived by a resident of a 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 a resident of a Contracting
State from the alienation of ships or aircrafts operated in international
traffic, or movable property pertaining to the operation of such ships or
aircrafts, shall be taxable only in that State. 4. Gains from the alienation of shares of the
capital stock of, or other corporate rights in, 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 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 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 183 days in any period of 12
month; in that case, only so much of the income as is derived from his
activities performed in that other State may be taxed in that other State. 2. The term professional services includes
especially independent scientific, literary, artistic, educational or teaching
activities as well as the independent activities of physicians, lawyers,
engineers, architects, surgeons, 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 2. Notwithstanding the provisions of paragraph
1, remuneration derived by a resident of a (a) the recipient is present in the other State for a period or periods
not exceeding in the aggregate 183 days in any twelve 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 exercised aboard
a ship or aircraft operated in international traffic by an enterprise of a Article 16 : Directors Fees - Directors fees and other similar payments derived by a resident of a 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 entertainer, such as a theatre, motion
picture, radio or television artiste, or a musician, or as a sportsperson, from
his personal activities as such exercised in the other Contracting State, may
be taxed in that other State. 2. Where income in respect of personal
activities exercised by an entertainer or a sportsperson in his capacity as
such accrues not to the entertainer 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
entertainer or sportsperson are exercised. 3. Notwithstanding the provisions of paragraphs
1 and 2, income derived by a resident of a Contracting State from his personal
activities as an entertainer or as a sportsperson shall be taxable only in that
State if the activities are exercised in the other Contracting State within the
framework of a cultural or sports exchange programs approved by both
Contracting States. 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) Salaries, wages and
other similar 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 salaries, wages and other similar 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 3. The provisions of articles 15, 16, 17 and 18
shall apply to salaries, wages and other similar remuneration and to pensions
in respect of services rendered in connection with a business carried on by a Article 20 : Professors, Teachers
and Research Scholars - 1.
A professor, teacher or research scholar 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 or other similar institution in that other Contracting State recognised by the Government of 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 2 years from the date of his
arrival in that other State. 2. The provisions of paragraph 1 of this Article
shall not apply to remuneration from research if such research is undertaken
not in the public interest but primarily for the private benefit of a specific
person or persons. 3. For the purposes of this Article, an
individual shall be deemed to be a resident of a Article 21 : Students - 1. A student who is or was a
resident of one of the Contracting States 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 besides grants, loans and
scholarships be exempt from tax in that other State on payments made to him for
the purpose of his maintenance, education or training, provided that such
payments arise from sources outside that State. 2. In respect of grants, scholarships and
remuneration from employment not covered by paragraph 1, a student or business
apprentice referred to in paragraph 1 shall, in addition, be entitled during
such education or training to the same exemptions, reliefs
or reductions in respect of taxes available to residents of the Contracting
State which he is visiting. 3. The benefits of this Article shall extend
only for such period of time as may be reasonable or customarily required to
complete the education or training undertaken. Article 22 : Other income - 1. Items of income of a resident of
a 2. The provisions of paragraph 1 shall not apply
to income, other than income from immovable property as defined in paragraph 2
of article 6, if the recipient of such income, being a resident of a
Contracting State, carries on business in the other Contracting State through a
permanent establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein, and the right
or property in respect of which the income is paid is effectively connected
with such permanent establishment or fixed base. In such case the provisions of
article 7 or article 14, as the case may be, shall apply. 3. Notwithstanding the provisions of paragraph
1, if a resident of a Contracting State derives income from sources within the
other Contracting State in the form of lotteries, crossword puzzles, races
including horse races, card games and other games of any sort or gambling or
betting of any nature whatsoever, such income may be taxed in the other
Contracting State. 4. Notwithstanding the provisions of paragraphs
1 and 2, items of income of a resident of a Article 23 : Methods for
elimination of double taxation
- Double taxation shall be eliminated as follows : 1. In (a) Where a resident of Such deduction shall not,
however, exceed that part of the income-tax as computed before the deduction is
given, which is attributable, as the case may be, to the income which may be
taxed in (b) Where in accordance with any provision of the Convention income
derived by a resident of 2. In (a) Where a resident of Such deduction shall not,
however, exceed that part of the income-tax, as computed before the deduction
is given, which is attributable, as the case may be, to the income which may be
taxed in (b) Where in accordance with any provision of the Convention income
derived by a resident of Article 24 : Non-discrimination - 1.
Nationals of a 2. The taxation on a permanent establishment
which an enterprise of a 3. Except where the provisions of paragraph 1 of
article 9, paragraph 7 of article 11, or paragraph 6 of article 12, apply,
interest, royalties and other disbursements paid by an enterprise of a
Contracting State to a resident of the other Contracting State shall, for the
purpose of determining the taxable profits of such enterprise, be deductible
under the same conditions as if they had been paid to a resident of the
first-mentioned State. Similarly, and 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 25 : 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 24, 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 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 26 : Exchange of
information - 1. The
competent authorities of the Contracting States shall exchange such information
(including documents or certified copies of the documents) as is necessary for
carrying out the provisions of this Convention or of the domestic laws
concerning taxes of every kind and description imposed on behalf of the
Contracting States, or of their political sub-division or local authorities,
insofar as the taxation thereunder is not contrary to
the Convention. The exchange of information is not restricted by articles 1 and
2. 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) concerned with the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to the taxes referred in the first sentence. 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 (a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other (b) to supply information (including documents or certified copies of
the documents) which is not obtainable under the laws or in the normal course
of the administration of that or of the other (c) to supply information which would disclose any trade, business,
industrial, commercial or professional secret or trade process, or information,
the disclosure of which would be contrary to public policy (ordre
public). Article 27 : Assistance in the
collection of taxes - 1.
The Contracting States shall lend assistance to each other in the collection of
revenue claims. This assistance is not restricted by articles 1 and 2. The
competent authorities of the Contracting States may by mutual agreement settle
the mode of application of this Article. 2. The term revenue claim as used in this
Article means an amount owed in respect of taxes of every kind and description
imposed on behalf of the Contracting State, or of their political sub-divisions
or local authorities, insofar as the taxation thereunder
is not contrary to this Convention or any other instrument to which the
Contracting States are parties, as well as interest, administrative penalties
and costs of collection or conservancy related to such amount. 3. When a revenue claim of a Contracting State
is enforceable under the laws of that State and is owed by a person who, at
that time, cannot, under the laws of that State, prevent its collection, that
revenue claim shall, at the request of the competent authority of that State,
be accepted for purposes of collection by the competent authorities of the
other contracting State. That revenue claim shall be collected by that other
State in accordance with the provisions of its laws applicable to the
enforcement and collection of its own taxes as if the revenue claim were a
revenue claim of that other State. 4. When a revenue claim of a Contracting State
is a claim in respect of which that State may, under its law, take measures of
conservancy with a view to ensure its collection, that revenue claim shall, at
the request of the competent authority of that State, be accepted for purposes
of taking measures of conservancy by the competent authority of the other
Contracting State. That other State shall take measures of conservancy in
respect of that revenue claim in accordance with the provisions of its laws as
if the revenue claim were a revenue claim of that other State even if, at the
time when such measures are applied, the revenue claim is not enforceable in
the first-mentioned State or is owed by a person who has a right to prevent its
collection. 5. Notwithstanding the provisions of paragraphs
3 and 4, a revenue claim accepted by a Contracting State for purposes of
paragraph 3 or 4 shall not, in that State, be subject to the time limits or
accorded any priority applicable to a revenue claim under the laws of that
State by reason of its nature as such. In addition, a revenue claim accepted by
a 6. Proceedings with respect to the existence,
validity or the amount of a revenue claim of a 7. Where, at any time after a request has been made
by a Contracting State under paragraph 3 or 4 and before the other Contracting
State has collected and remitted the relevant revenue claim to the
first-mentioned State, the relevant revenue claim ceases to be (a) in the case of a request under paragraph 3, a revenue claim of the
first-mentioned State that is enforceable under the laws of that State and is
owed by a person who, at that time, cannot, under the laws of that State,
prevent its collection, or (b) in the case of a request under paragraph 4, a revenue claim of the
first-mentioned State in respect of which that State may, under its laws, take
measures of conservancy with a view to ensure its collection. The competent
authority of the first-mentioned State shall promptly notify the competent authority
of the other State of that fact and, at the option of the other State, the
first-mentioned State shall either suspend or withdraw its request. 8. In no case shall the provisions of this
Article be construed so as to impose on a (a) to carry out administrative measures at variance with the laws and
administrative practice of that or of the other (b) to carry out measures which would be contrary to public policy (ordre public); (c) to provide assistance if the other Contracting State has not
pursued all reasonable measures of collection or conservancy, as the case may
be, available under its laws or administrative practice; (d) to provide assistance in those cases where the administrative burden
for that State is clearly disproportionate to the benefit to be derived by the
other Article 28 : Limitation of
benefits - 1. Except
as otherwise provided in this, Article, a resident of a Contracting State who
derives income from the other Contracting State shall be entitled to all the
benefits of this Convention otherwise accorded to residents of a Contracting
State only if such resident is a qualified person as defined in paragraph 2
and meets the other conditions of this Convention for the obtaining of such
benefits. 2. A resident of a (a) an individual; (b) a qualified governmental entity; (c) a company, if (i) the principle class of its shares is listed on
a recognized stock exchange specified in sub-paragraph (a) or (b)
of paragraph 6 and is regularly traded on one or more recognized stock
exchanges; or (ii) at least 50 per cent of the aggregate vote and
value of the shares in the company is owned directly or indirectly by five or
fewer companies entitled to benefits under sub-division (i)
of this sub-paragraph, provided that, in the case of indirect ownership, each
intermediate owner is a resident of either Contracting State; (d) A charity or other tax-exempt entity, provided that, in the case of
a pension trust or any other organization that is established exclusively to
provide pension or other similar benefits, more than 50 per cent of the
persons beneficiaries, members or participants are individuals resident in
either Contracting State; or (e) a person other than an individual, if : (i) on at least half the days of the fiscal year
persons that are qualified persons by reason of sub-paragraph (a), (b)
or (d) or sub-division (c)(i) of
this paragraph own, directly or indirectly, at least 50 per cent of the
aggregate vote and value of the shares or other beneficial interests in the
person; and (ii) less than 50 per cent of the persons gross
income for the taxable year is paid or accrued, directly or indirectly, to
persons who are not residents of either Contracting State in the form of
payments that are deductible for purposes of the taxes covered by this
Convention in the persons State of residence (but not including arms length
payments in the ordinary course of business for serviced or tangible property
and payments in respect of financial obligations to a bank, provided that where
such a bank is not a resident of a Contracting State such payment is attributable
to a permanent establishment of that bank located in one of the Contracting
States). 3. (a) A resident of a Contracting State
will be entitled to benefits of the Convention with respect of an item of
income, derived from the other State, regardless of whether the resident is a
qualified person, if the resident is actively carrying on business in the
first-mentioned State (other than the business of making or managing
investments for the residents own account, unless these activities are banking,
insurance or securities activities carried on by a bank, insurance company or
registered securities dealer), the income derived from the other Contracting
State is derived in connection with, or is incidental to, that business and
that resident satisfies the other conditions of this Convention for the
obtaining of such benefits. (b) If
the resident or any of its associated enterprises carries on a business
activity in the other (c) In
determining whether a person is actively carrying on business in a 4. Notwithstanding the preceding provisions of
this Article, if a company that is a resident of a Contracting State, or a
company that controls such a company, has outstanding a class of shares. (a) which is subject to terms or other arrangements which entitle its
holders to a portion of the income of the company derived from the other
Contracting State that is larger than the portion such holders would receive
absent such terms of arrangements (the disproportionate part of the income);
and (b) 50 per cent or more of the voting power and value of which is owned
by persons who are not qualified persons. The benefits
of this Convention shall not apply to the disproportionate part of the income. 5. A resident of a Contracting State that is
neither a qualified person pursuant to the provisions of paragraph 2 or
entitled to benefits under paragraph 3 or 4 shall, nevertheless, be granted
benefits of the Convention if the competent authority of that other Contracting
State determines that the establishment, acquisition or maintenance of such
person and the conduct of its operations did not have as one of its principal
purposes the obtaining of benefits under the Convention. 6. For the purposes of this Article the term
recognized stock exchange means: (a) in India, a stock exchange which is for the time being recognized
by the Central Government under section 4 of the Securities Contracts
(Regulation) Act, 1956; (b) in (c) any other stock exchange which the competent authorities agree to recognise for the purposes of this article. Article 29 : Members of diplomatic
missions and consular post
- Nothing in this Convention
shall effect the fiscal privileges of members of diplomatic missions or
consular posts under the general rules of international law or under the
provisions of special agreements. Article 30 : Entry into force - 1. The Contracting States shall
notify each other in writing, through diplomatic channels, of the completion of
the procedures required by the respective laws for the entry into force of this
Convention. 2. This Convention shall enter into force on the
date of the later of the notifications referred to in paragraph 1 of this
Article. 3. The provisions of this Convention shall have
effect : (a) In in respect of income
derived 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 (i) in respect of taxes withheld at source - on
income derived on or after the first day of January in the calendar year next
following the year in which the Convention enters into force; (ii) in respect of other taxes on income - for
taxes chargeable for any tax year beginning on the first day of January in the
calendar year next following the year in which the Convention enters into
force. Article 31 : Termination - This Convention shall remain in force
indefinitely until terminated by a (a) In in respect of income
derived in any fiscal year on or after the first day of April next following
the calendar year in which the notice is given; (b) in (i) in respect of taxes withheld at source - on income
derived on or after the first day of January in the calendar year next
following the year in which the notice of termination has been given; (ii) in respect of other taxes on income - for
taxes chargeable for any tax year beginning on the first day of January in the
calendar year next following the year in which the notice of termination has
been given. In witness
whereof the undersigned, duly authorized thereto, have signed this Convention. Done in
duplicate on this Thirty first day of October, 2003, each in the Hindi,
Armenian and English languages, all texts being equally authentic. In case of
divergence of interpretation, the English text shall prevail.
|
|||||
|
Read our
disclaimer and
privacy policy |
|||||
