United Arab Republic
Double Taxation
Avoidance Agreement
CONVENTION BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF
THE UNITED
ARAB REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME [CD1]
Notification No.
G.S.R. 2363, dtd. 30.9.1969.
Whereas the annexe Convention between the
Government of India and the Government of the United Arab Republic for the
avoidance of double taxation with respect to taxes on income has been ratified
and the instruments of ratification exchanged, as required by Article 29 of the
said Convention:
Now, therefore, in exercise of the powers
conferred by section 90 of the Income-tax Act, 1961 (43 of 1961) and section
24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central
Government hereby directs that all the provisions of the said Convention shall
be given effect in to the Union of India.
ANNEXURE CONVENTION BETWEEN
THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE UNITED ARAB REPUBLIC FOR THE
AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME
The Government of India and the Government of
the United Arab Republic,
Desiring
to conclude a Convention for the avoidance of double taxation with respect to
taxes on income,
Have agreed as follows:
CHAPTER I SCOPE OF THE CONVENTION ARTICLE 1 Personal
Scope
This Convention shall apply to persons who are
residents of one or both of the Contracting States.
ARTICLE 2 Taxes covered
1.
This Convention shall apply to taxes on income imposed
on behalf of each Contracting State or of its political sub-divisions or local authorities,
where, they have the authority, irrespective of the manner in which they are
levied.
2.
There shall be regarded as taxes on income all taxes
imposed on total income or on all elements of income including taxes on gains
from the sale, exchange or transfer 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 the case
of India:
1.
the income-tax, including super tax and the surcharge
imposed under the Income-tax Act, 1961 (43 of 1961); and
2.
the surtax imposed under the Companies (Profits) Surtax
Act, 1964 (7 of 1964); (hereinafter referred to as " Indian tax ".)
b.
In the case
of the United Arab Republic:
1.
tax on income derived from immovable property
(including the land tax, the buildings tax and the ghaffir tax);
2.
tax on income from movable capital;
3.
tax on commercial and industrial profits;
4.
tax on wages, salaries, indemnities and pensions (as
mentioned in book III of Law (14 of 1939);
5.
tax on profits from liberal professions and all
non-commercial professions;
6.
general income-tax;
7.
defence tax (imposed on income);
8.
national security tax (imposed on income); and
9.
supplementary taxes imposed as percentage of taxes
mentioned above;
(hereinafter referred to as " United Arab Republic tax ").
1.
The Convention shall also apply to any identical or
substantially similar taxes which are subsequently imposed in addition to, or
in the place of, the existing taxes.
2.
At the end of each year, the competent authority of the
Contracting States shall notify to each other any singnificant changes which
have been made in their respective taxation laws.
CHAPTER II DEFINITIONS Article
3 General definitions
1.
In this Convention, unless the context otherwise
requires;
a.
the term " India " shall have the meaning
assigned to it in Article 1 of the Constitution of India;
b.
the term " United Arab Republic " means
Egypt;
c.
the terms " a Contracting state " and "
the other Contracting state " mean India or the United Arab Republic, as
the context requires;
d.
the term " tax " means Indian tax or United
Arab republic tax, the context requires;
e.
the term " person " includes individuals,
companies and all other entities which are treated as taxable units under the
tax laws in force in either Contracting state;
f.
the term " company " for tax purposes means
any entity which is treated as a company under the Indian tax law or any entity
which is treated as a body corporate under the United Arab Republic tax law;
g.
the terms " enterprise of a Contracting State
" and " enterprise of the other Contracting State ", mean,
respectively, an enterprise carried on by a resident of a Contracting State and
an enterprise carried on by a resident of the other Contracting State;
h.
the term " competent authority " means in the
case of India the Central Government in the Ministry of Finance (Department of
Revenue and Insurance); and in the case of the United Arab Republic, the
Minister of Treasury or his authorised representative.
2.
In the application of the provisions of this Convention
by one of the Contracting States any term not otherwise defined shall, unless
the context otherwise requires, have the meaning which it has under the laws in
force in that State relating to the taxes which are the subject of this
Connvention.
Article 4 Fiscal Domicile
1.
For the purposes of this Convention the term "
resident of a Contracting State " means any person who under the law of
the State, is resident of that State for the purposes of taxation therein by
reason of his domicile, residence, place of management or any other criterion
applied under the tax laws of that State.
2.
Where by reason of the provisions of paragraph 1, an
individual is a resident of both Contracting States, then his case shall be
determined in accordance with the followiing rules:
a.
He shall be deemed to be a resident of the Contracting
State, in which he has a permanent home available to him. If he has permanent
home available to him in both Contracting States, he shall be deemed to be a
resident of the Contracting State with which his personal and economic
relations are closest (Centre of vital interest):
b.
If the Contracting 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 Contracting State, he shall be deemed to be a
resident of the Contracting State in which he has an habitual abode;
c.
If he has an habitual abode in both Contracting States
or in neither of them, he shall be deemed to be a resident of the Contracting
State of which he is a national;
d.
If he is a national of both Contracting States or if
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 Contracting 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 in which the
business of the enterprise is wholly or partly carried on.
2.
The term "permanent establishment" shall
include:
a.
a place of management;
b.
a branch;
c.
an office;
d.
a factory;
e.
a workshop or a warehouse;
f.
a mine, a quarry, an oilfield or other place of
extraction of natural resources;
g.
a permanent sales exhibition;
h.
a building site or construction or assembly project
which exists for more than ninety days.
3.
The term "permanent establishment" shall not
be deemed 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 fixed place of business solely for
the purpose of purchasing goods or merchandise or for collecting information,
for the enterprise; and
d.
the maintenance of a fixed place of business solely for
the purpose of advertising or for scientific research, for the enterprise.
4.
A person acting in one of the Contracting States for or
on behalf of an enterprise of the other Contracting State, shall be deemed to
be a permanent establishment of that enterprise, or in the first mentioned
State if:
i.
he has and habitually exercises in that State a
general authority to negotiate and enter into
contracts for or on behalf of the
enterprise, unless the activities of the person are limited to the purchase of
goods or merchandise for the enterprise, or
ii.
he habitually maintains in the first-mentioned
Contracting State a stock of goods or
merchandise belonging to the enterprise from
which the person regularly delivers goods or merchandise for or on behalf of
the enterprise, or
iii.
he habitually secures orders in the
first-mentioned Contracting State exclusively or almost exclusively, for the
enterprise itself or for the enterprise and other enterprises whcih are
controlled by it or have a controlling interest in it.
5.
An enterprise of a Contracting State shall not be
deemed to have a permanent establishment in the other Contracting State merely
because it carries on business in that other State through a broker of a
genuinely independent status.
6.
The fact that a company, which is a resident of one of
the Contracting states, has a subsidiary company which either is a resident of
the other Contracting State or carries on a trade or business in that other
Contracting State (whether through a permanent establishment or otherwise)
shall not, of itself, constitute that subsidiary company a permanent
establishment of its parent company.
CHAPTER III TAXATION OF INCOME ARTICLE
6 INCOME FROM IMMOVABLE PROPERTY
1.
Income from immovable property shall be taxable only in
the Contracting state in which such property is situated.
2.
The term " immovable property " shall be
defined in accordance with the law and usage of the Contracting state in which
the property in question is situated. The term shall in any case include
property accessory to immovable property, live-stock and equipment used in
agriculture and foresrty, 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 paragraph 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 professional services.
ARTICLE 7 BUSINESS PROFITS
1.
The profits of an enterprise of a Contracting State
shall be taxable only in that 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.
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 attributted to that
permanent establishment that 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 independent
with the enterprise of which it is a permanent establishment.
3.
In the determination of the profits of a permanent
establishment, there shall be allowed as deductions expenses which are incurred
for the purposes of the permanent establishment including executive and general
administrative expense so incurred, whether in the State in which the permanent
establishment is situated or elsewhere.
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 vairous
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 laid down in this Article.
5.
No profits shall be attributable to a permanent
establishment by reason of the mere purchase by that permanent establishment of
goods or merchandise for the purpose of export to the enterprise of which it is
the permanent establishment.
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 the present Article.
ARTICLE 8 Air Transport
1.
Income derived from the operation of aircraft by an
enterprise of one of the Contracting States shall not be taxed in the other
Contracting State unless the aircraft is operated wholly or mainly between
places within that other Contracting State.
2.
Paragraph 1 shall likewise apply in respect of
participations in pools of any kind by enterprises engaged in air-transport.
Article 9 Shipping
Income derived from the operation of ships by
an enterprise of one of the Contracting States shall not be taxed in the other
Contracting State unless the ships are operated wholly or mainly between places
within that other Contracting State.
ARTICLE 10 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.
If the information available to the taxation authority
concerned is inadequate to determine, for the purposes of paragraph 1 of this
Article, the profits which might be expected to accrue to an enterprise,
nothing in that paragraph shall affect the application of the law of either
Contracting State in relation to the liability of that enterprise to pay tax on
an amount determined by the exercise of a discretion or the making of an
estimate by the taxation authority of that State.
Provided that such discretion shall be
exercised or such estimate shall be made, so far as the information available
to the taxation authority permits, in accordance with the principle stated in
that paragaph.
Provided further that the amount so determined
or the estimate so made may be amended or revised when adequate information is
furnished to the taxation authority concerned.
Article 11 Dividends
1.
Dividends paid by a company which is a resident of the
to a resident of the United Arab Republic may be taxed in India.
2.
Dividends paid by a company which is a resident of the
United Arab Republic to a resident of India may be taxed in the United Arab
Republic. But such dividends shall only be subject to the tax on income derived
from movable capital, the defence tax, the national security tax and the
supplementary taxes (which taxes shall be deducted at the source). If paid to a
natural person, the general income-tax levied on the net total income may also
be imposed. Dividends paid shall be deducted from the amount of the distributing
company's taxable income or profits subject to
the tax chargeable in respect of its
industrial and commercial profits if such dividends are distributed out of the
taxable profits of the same taxable year but not distributed out of accumulated
reserves or other assets.
3.
Dividends paid by a company which is a resident of
India whose activities lie solely or mainly in the United Arab Republic shall,
in the United Arab Republic, be treated as mentioned in paragraph 2 of this
Article when such dividends are distributed in the United Arab Republic.
4.
Dividends paid by a company which is a resident of the
United Arab Republic whose activities lie solely or mainly in India shall, in
India, be treated as mentioned in paragraph 1 of this Article when such dividends
are distributed in India.
5.
Dividends, deemed under Article 11 of United Arab
Republic Law 14 of 1939 to be paid out of the yearly profits of a permanent
establishment maintained in the United Arab Republic by an Indian company whose
activities extend to countries other than the United Arab Republic shall, in
the United Arab Republic, be treated as mentioned in paragraph of this Article.
The permanent establishment shall be
considered to have distributed as dividends in the United Arab Republic within
60 days from the closing of its financial year, an amount equivalent to 90 per
cent of its total net profits liable to the tax on industrial and commercial
profits without applying the provisions of Article 36 of Law 14 of 1939,
provided that the remaining 10 per cent of the net profits shall be set aside
to form a special reserve which shall be entered in the local balance-sheet
submitted annually to the United Arab Repubic tax authorities. Such amount
shall only be subject to the tax on commercial and industrial profits.
All amounts deducted from the aforesaid 10 Per
cent set aside to form the special reserve for purposes other than the
redemption of losses incurred in the trade or business carried on by that
permanent establishment situated in the United Arab Republic shall be deemed to
have been distributed in the United Arab Republic and shall be taxed
accordingly.
6.
The provisions of paragraphs 1 and 4 of this Article,
in the case of the United Arab Republic, shall not affect application of
Article 4 of Law 14 of 1939, but the provisions of those paragraphs will be
applied for the purpose of elimination of double taxation in accordance with
provisions of paragraph 2 of Article 24 of this Convention.
Article 12 Interest
1.
Interest paid by a resident of India to a resident of
the United Arab Republic may be taxed in India.
2.
Interest paid by a resident of the United Arab Republic
to a resident of India may be taxed in the United Arab Republic. But such
interest shall only be subject to the tax on income derived from movable
capital, the defence tax, the national security tax and the supplementary taxes
(which taxes shall be deducted at the source. If paid to a natural person, the
general income-tax levied on the net total income may also be imposed.
3.
The term " interest " as used in this Article
includes income from Government securities, bonds or debentures (exclusive of
interest on debts secured by mortgages on real estate, in which case Article 6
shall apply) and whether or not carrying a right to participate in profits, and
debt-claims of every kind as well as all other income assimilated to income
from money lent by the taxation law of the State in which the income arises.
4.
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 Contracting State or not, has in a
Contracting State a permanent establishment in connection with which the
indebtedness on which the interest is paid was incurred, and such interest is
borne by such permanent establishment then such interest shall be deemed to
arise in the Contracting State in which the permanent establishment is
situated.
5.
The provisions of paragraph 1 of this Article in the
case of the United Arab Republic shall not affect the application of Article 4
of Law 14 of 1939, but the provisions of that paragraph will be applied for the
purpose of elimination of double taxation in accordance with provisions of
paragraph 2 of Article 24 of this Convention.
Article 13 Royalties
1.
Royalties arising in a Contracting State and paid to a
resident of the other Contracting State shall be taxable only in the
first-mentioned State.
2.
The term " royalties " is 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 scientfic work, 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
but does not include any royalty or other like amount in respect of the
operation of mines, quarries or any other place of extraction of natural
resources.
3.
Rents and royalties arising in a Contracting State in
respect of cinematographic films and paid to a resident of the other
Contracting State shall be taxable only in the first mentioned State according
to the tax laws of that State.
4.
The provisions of this Article shall not apply where
founders' shares are issued in the United Arab Republic as a consideration for
the rights mentioned in paragraph 2 of this Article and taxed in accordance
with the provisions of Article 1 of Law 4 of 1939. In such event Article 11 of
this Convention shall be applicable.
5.
Royalty 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.
ARTICLE 14 Capital gains
1.
Subject to the provisions of paragraph 3, gains from
the sale, exchange or transfer of a capital asset being immovable property, as
defined in paragraph 2 of Article 6, or movable property shall be taxable only
in the Contracting State in which such property is situated.
2.
For the purpose of this Article the situs of the shares
of a company shall be deemed to be in the Contracting State where the company
is incorporated.
3.
Capital gains derived from the sale, exchange or
transfer of a capital asset being a ship or aircraft shall be taxable only in
the Contracting State in which such ship or aircraft is registered.
ARTICLE 15 Independent
personal services
1.
Income derived by a resident of the United Arab Republic
in respect of professional services rendered or other independent activities of
a similar character performed in India may be taxed in
India only if he is present in India for a
period or periods exceeding in the aggregate 183 days
during the relevant " previous year
" and only to the extent the income is attributable to such services or
activities in India.
2.
Income derived by a resident of India in respect of
professional services rendered or other independent activities of a similar
character performed in the United Arab Republic may be taxed in the United Arab
Republic only if he is present in the United Arab Republic for a period or
periods excceding in the aggregate 183 days during the relevant " fiscal
year ", and only to the extent the income is attributable to such services
or activities in the United Arab Republic.
3.
The term "professional services" includes
independent scientific, literary, artistic, educational or teaching activities
as well as the independent activities of physicians, lawyers, engineers,
architects, dentists and accountants.
Article 16 Dependent personal
services
1.
Subject to the provisions of Articles 17, 19 and 20,
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 the United Arab Republic in respect of an
employment exercised in India shall not be taxed in India if:
a.
he is present in India for a period or periods not
exceeding in the aggregate 183 days during the relevant " previous year
", and
b.
the remuneration is paid by, or on behalf of an
employer who is not resident of lndia;
c.
the remuneration is subject to United Arab Republic
tax, and
d.
the remuneration is not deducted in computuing profits
of an enterprise chargeable to Indian tax.
3.
Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of India in respect of an employment
exercised in the United Arab Republic shall not be taxed in the United Arab
Republic if:
a.
he is present in the United Arab Republic for a period
or periods not exceeding in the aggregate 183 days during the relevant "
fiscal year ", and
b.
the remuneration is paid by, or on behalf of an
employer who is not resident of the United Arab Republic, and
c.
the remuneration is subject to Indian tax, and
d.
the remuneration is not deducted in computing profits
of an enterprise chargeable to United Arab Republic tax.
4.
Notwithstanding the preceding provisions of this
Article, remuneration in respect of an employment exercised aboard a ship or
aircraft in international traffic, may be taxed in the Contracting State in
which the place of effective management of the enterprise is situated.
Article 17 Directors' Fees
Directors' fees and similar payments derived
by a resident of a Contracting State in his capacity as a member of the board
of directors of a company which is a resident of the other Contracting State
may be taxed in that other State.
Article 18 Artistes and
Athletes
1.
Notwithstanding anything contained in Articles 15 and
16 income derived by public entertainers, such as theatre, motion picture,
radio or television artistes, and musicians; and by athletes from their
personal activities as such may be taxed in the Contracting State in which these
activities are exercised.
2.
The provisions of paragraph 1 shall apply only if the
personal activities are exercised in the Contracting State for a period or
periods in the aggregate exceeding 15 days during the relevant " previous
year " or, as the case may be, " fiscal year ", and only in
respect of the income attributable to the personal activities exercised in that
State.
ARTICLE 19 Pensions
Subject to the provisions of paragraph 1 of
Article 20, 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 20 Government
functions
1.
Remuneration, including pensions, paid by, or out of
funds created by, a Contracting State or a political sub-division or a local
authority thereof, to any individual in respect of services rendered to that
State or sub-division or local authority thereof in the discharge of functions
of a
governmental nature may be taxed in that State.
2.
The provisions of paragraph 1 of this Article shall
also apply to remuneration including pensions, paid by the Central Bank, the
Post, Railways, Telephone and telegraph, Radio and Television organisations of
the United Arab Republic and by the Reserve Bank of India, Postal
Administration, the Public Railway Authorities and the All India Radio
Organisation of India.
3.
The provisions of Articles 16, 17 and 19 shall apply to
remuneration or pensions in respect of services rendered in connection with any
trade or business other than those mentioned in paragraph 2 carried on by any
of the legal entities mentioned in this Article.
ARTICLE 21 Students
An individual of one of the Contracting
States, who is temporarily present in the other Contracting State solely: -
a.
as a student at a university, college or school in the
other Contracting State,
b.
as a business or technical apprentice, or
c.
as the recipient of a grant, allowance or award for the
primary purpose of study or research from a religious, charitable, scientific
or educational organisation.
shall not be taxed in the other Contracting
State in respect of remittances from abroad for the purposes of his
maintenance, education or training or in respect of a scholarship grant. The
same shall apply to any amount representing remuneration for services rendered
in that other State, provided that such services are in connection with his
studies or practical training or are necessary for the purpose of his
maintenance.
ARTICLE 22 Professors,
Teachers and Researchers
A professor or a teacher from one of the
Contracting States who receives remuneration for teaching or scientific
research, during a period of temporary residence not exceeding two years, at a
university, college, technical school or other institution for higher education
in the other Contracting State, shall not be taxed in that other Contracting
State in respect of that remuneration.
ARTICLE 23 Income not
expressly mentioned
The laws in force in either of the Contracting
States will continue to govern assessment and taxation of income in the
respective Contracting States except where express provision to the contrary is
made in this Convention.
CHAPTER IV METHOD FOR
ELIMINATION OF DOUBLE TAXATION ARTICLE 24 Exemption and
credit methods
1.
Where a person being a resident of a Contracting State derives
income from the other Contracting State and that income, in accordance with the
provisions, of this Convention, shall be taxable only in that other Contracting
State, or may be taxed in that other Contracting State, the first-mentioned
State shall, subject to the provisions of paragraph 2, exempt such income from
tax but may, in calculating tax on the remaining income of that person, apply
the rate of tax which would have been applicable if the exempted income had not
been so exempted.
2.
Where a person being a resident of a Contracting State
derives income from the other Contracting State and that income, in accordance
with the provisions of Articles 11 and 12 may be taxed in that other
Contracting State, the first-mentioned State shall allow as a deduction from
the tax on the income of that person on amount equal to the tax paid in that
other Contracting State. Such deduction shall not, however, exceed that part of
the tax, as computed before the deduction is given, which is appropriate to the
income derived from that other Contracting State.
CHAPTER X SPECIAL PROVISIONS ARTICLE
25 Non-discrimination
1.
The nationals of a Contracting State shall not be
subjected in the other Contracting State to any taxation or any requirement
connected therewith which is other or more burdensome than the taxation and
connected requirements to which nationals of that other State in the same
circumstances and under the same conditions are or may be subjected.
2.
The term " nationals " means:
a.
all individuals possessing the nationality of a
Contracting State;
b.
all legal persons, partnerships and associations
deriving their status as such from the law in force in a Contracting State.
3.
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.
4.
Enterprises of a Contracting State, the capital of
which is wholly or partly owned or controlled, directly or indirectly, by one
or more residents of the other Contracting State, shall not be subjected in the
first-mentioned Contracting State to any taxation or any requirement connected
therewith which is other or more burdensome than the taxation and connected
requirements to which other similar enterprises of that first-mentioned State
are or may be subjected in the same circumstances and under the same
conditions.
5.
The provisions of this Article shall not be construed
as affecting the application in the United Arab Republic of the exemptions
conferred in the United Arab Republic by Articles 5 and 6 of Law 14 of 1939.
6.
In this Article the term " taxation " means
taxes of every kind as specified in this Convention.
ARTICLE 26 Mutual Agreement
Procedure
1.
Where a resident of a Contracting State considers that
the actions of one or both of the Contracting States result or will result for
him in taxation not in accordance with this Convention, he may, notwithstanding
the remedies provided by the national laws of those States, present his case to
the competent authority of the Contracting State of which he is a resident.
2.
The competent authority shall endeavour, if the
objection appears to it to be justified and if it is not itself able to arrive
at an appropriate solution, to resolve the case by mutual agreement with the
competent authority of the other Contracting State, with a view to the
avoidance of taxation not in accordance with the Convention.
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. The 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 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 as is necessary for the carrying out of this
Convention and of the domestic laws of the Contracting States concerning taxes
covered by this Convention in so far as the taxation thereunder is in
accordance with this Convention. Any information so exchanged shall be treated
as secret and shall not be disclosed to any persons or authorities other than
those concerned with the assessment including judicial determination, or
collection of the taxes which are the subject of this convention.
2.
In no case shall the provisions of paragraph be
construed so as to impose on one of the Contracting States the obligation:
a.
to carry out administrative measures at variance with
the laws or the administrative practice of that or of the other Contracting
State;
b.
to supply particulars 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 (order
public).
ARTICLE 28 Diplomatic and
Consular Privileges
Nothing in this Convention shall affect the
fiscal privileges of diplomatic or consular officials under the general rules
of international law or under the provisions of special agreements.
CHAPTER VI FINAL PROVISIONS ARTICLE
29 Entry into force
1.
This Convention shall be ratified and the instruments
of ratification shall be exchanged at New Delhi as soon as possible.
2.
This Convention shall enter into force on the date of
the exchange of the instruments of ratification and its provisions shall have
effect:
a. In India:
i.
in the case of income derived from operation of
aircraft (referred to in Article 8), as respects such income derived during any
" previous year " beginning on or after the first day of January,
1961;
ii.
in the case of any other income, as respects
income derived during any " previous year " beginning on or after the
first day of January of the calendar year in which the exchange of the
instruments of ratification takes place.
a. In the United Arab Republic:
i.
in the case of income from operation of aircraft
(referred to in Article 8), as respects such income derived during any
accounting period ending on or after the first day of January, 1961;
ii.
in the case of any other income,-
1.
as respects tax on income from movable capital and tax
on wages, salaries, indemnities, and pensions, which taxes are due on or after
the date on which the exchange of the instruments of ratification takes place;
2.
as respects tax on commercial and industrial profits
for any accounting period ending on or after the date on which the exchange of
the instruments of ratification takes place;
3.
as respects tax on income derived from immovable
property (including the land tax, the building tax and the ghaffir tax), tax on
profits from liberal professions and all other non-commerical professions and
the general income-tax for the calendar year in which the exchange of the
instalments of ratification takes place.
The rules in sub-paragraph (b) of this
paragraph shall be correspondingly applicable respectively to the defence tax,
national security tax and to the supplementary taxes.
ARTICLE 30 Termination
1.
Either of the Contracting States may terminate this
Convention after a period of five years from the date on which this Convention
enters into force, by giving to other Contracting State, through the diplomatic
channels, written notice of termination, provided that such notice shall be
given only on or before the thirtieth day of June in any calendar year, and in
such event, this Convention shall cease to be effective:
a.
In India:
As respects income derived during any "
previous year " beginning on or after the first day of January of the
calendar year next following that in which the notice is given.
b.
In the
United Arab Republic:
a.
as respects tax on income from movable capital and tax
on wages, salaries, indemnities and pensions, which taxes are due on or after
the first day of July in the calendar year next following that in which the
notice is given;
b.
as respects tax on commercial and industrial profits
for any accounting period ending on or after the first day of July in the
calendar year next following that in which the notice is given.
c.
is respects tax on income derived from immovable
property (including the land tax, the buildings tax and ghaffir tax), tax on
profits from liberal professions and all other noncommercial professions and
the general income-tax for the calendar year next following that in which the
notice is given.
The rules in sub-paragraph (b) of this
paragraph shall be respondingly applicable respectively to the defence tax,
national security tax and to the supplementary taxes.
IN
WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed
this Convention.
Done in duplicate at Cairo this Twentieth day
of February, 1969 in the English language.
Sd./-
APA B. PANT, Sd/- AHMED EL. SAYED SHABAN, For
the Government of India:
For the Government of United Arab Republic
Cairo, the 20th
February, 1969.
Dear Sir,
The Convention between the Government of India
and the Government of United Arab Republic for the avoidance of double taxation
with respect to taxes on income being signed today, I have the honour on behalf
of the Government of India, to inform you that the two Contracting States have
agreed as follows:
The provisions of Article 8 (Air transport) of
the said Convention being operative under the terms of Article 29 (Entry into
force) of the Convention, in the case of India, as respects income derived from
operation of aircraft during any " previous year " beginning on or
after the first day of January, 1961, and in the case of the United Arab
Republic, as respects such income derived during any accounting period ending
on or after the first day of January, 1961:
Where any taxes covered by this Convention have
been paid or are payble in one of the Contracting States by a designated
airline of the other Contracting State as respects such income derived by it
during any " previous year " or accounting period aforesaid, the
first mentioned Contracting State shall refund such taxes to or, as the case
may be, refrain from charging such taxes from the designated airline.
The designated airline aforesaid shall, in the
case of India, be the Air India, and in the case of the United Arab Republic,
be the United Arab Airlines.
2.
I should be grateful if you confirm your agreement to
the above understanding of the provisions of Article 8 read with Article 29 of
the said Convention, and that in such case, this note and your reply thereto
shall be deemed to be part of the Convention.
3.
Please accept, Your Excellency, the assurances of my
highest, consideration.
Sd./- Apa B. Pant
His Excellency Mr.
Ahmed El Sayed Shaban, Under Secretary for the Taxation Department, Ministry of
Treasury, Government of the United Arab Republic, Cairo.
Cairo, the 20th
February, 1969.
Dear Sir,
With reference to the Convention signed to-day
between the Government of the United Arab Republic and the Government of India
for the avoidance of double taxation with respect to taxes on income, you, on
behalf of the Government of India, informed me of the following:
The convention between the Government of lndia
and the Government of the United Arab Republic for the avoidance of double
taxation with respect to taxes on income being signed to-day, I have the
honour, on behalf of the Government of India, to inform you that the two
Contracting States have agreed as follows:
The provisions of Article 8 (Air Transport) of
the said Convention being operative under the terms of Article 29 (Entry into
force) of the Convention, in the case of India, as respects income derived from
operation of aircraft during any " previous year " beginning on or
after the first day of January, 1961, and in the case of the United Arab
Republic, as respects such income derived during any accounting period ending
on or after the first day of January, 1961:
Where any taxes covered by this Convention
have been paid or are payable in one of the Contracting States by a designated
airline of the other Contracting State as respects such income derived by it
during any " previous year " or accounting period aforesaid, the
first-mentioned Contracting State shall refund such taxes to or, as the case
may be, refrain from charging such taxes from the designed airline.
The designated airline aforesaid shall, in the
case of India, be the Air India, and in the case of the United Arab Republic,
be the United Arab Airlines.
1.
I should be grateful if you confirm your agreements to
the above understading of the provisions of Article 8 read with Article 29 of
the said Convention, and that in such case, this note and your reply thereto
shall be deemed to be part of the Convention. "
2.
I have the honour to confirm that the above-mentioned
proposal meets with the approval of the Government of the United Arab Republic.
Your Note of today's date and my reply thereto
shall, therefore be part of the Convention.
3.
Please accept, your Excellency, the assurances of my
highest consideration.
Sd/-- His Excellency Mr. Apa B. Pant, AHMED EL
SAYED SHABAN Ambassador of India, Cairo
[CD1]CONVENTION
BETWEEN THE GOVERNMENT OF INDIA AND THE GOVERNMENT OF THE UNITED
ARAB REPUBLIC FOR THE
AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME
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