Kazakstan
Double Taxation
Avoidance Agreement
Income-tax Act, 1961:
Notification under section 90: Convention between the Government of the
Republic of India and the Government of the Republic of Kazakstan for the
avoidance of double taxation and for the prevention of fiscal evasion with
respect to taxes on income and on capital
Notification
No. G. S. R. No. 633(E), dtd. 31st October, 1997.
Whereas
the annexed Convention between the Government of the Republic of Kazakstan and
the Government of the Republic of India for the avoidance of Double Taxation
and the prevention of fiscal evasion with respect to taxes on income and on
capital will enter into force on the second day of October, 1997, thirty days
after the receipt of the latter of notifications by both the Contracting States
to each other of the completion of the procedures required under their laws for
bringing into force the said Convention in accordance with Article 30 of the
said Convention;
Now,
therefore, in exercise of the powers conferred under section 90 of the
Income-tax Act, 1961 (43 of 1961) and section 44A of the Wealth-tax Act, 1957
(27 of 1957), the Central Government hereby directs that all the provisions of
the said Convention shall be given effect to in the Union of India.
CONVENTION
BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE
REPUBLIC OF KAZAKSTAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND FOR THE
PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
The
Government of the Republic of India and the Government of the Republic of
Kazakstan desiring to conclude a Convention for the avoidance of double
taxation and for the prevention of fiscal evasion with respect to taxes on
income and on capital,
Have
agreed as follows:
Article
1
PERSONAL
SCOPE
This
Convention shall apply to persons who are residents of one or both of the
Contracting States.
Article
2
TAXES
COVERED
1. This Convention shall
apply to taxes on income and on capital imposed on behalf of a Contracting
State or of its political sub-divisions or local authorities irrespective of
the manner in which they are levied.
2. There shall be
regarded as taxes on income and on capital all taxes imposed on total income,
on total capital, or on elements of income or of capital, including taxes on
gains from the alienation of movable or immovable property, taxes on the total
amounts of wages or salaries paid by enterprises as well as taxes on capital
appreciation.
3. The existing taxes to
which the Convention shall apply are in particular:
a. In the Republic of
Kazakstan:
i.
the
tax on income of legal persons and individuals;
ii.
the
tax on the property of legal persons and individuals;
(hereafter
referred to as "Kazakstan tax");
b. In the Republic of
India:
i.
the
income-tax, including any surcharge thereon; and
ii.
the
tax on capital (the wealth-tax);
(hereafter
referred to as "Indian tax").
1.
2.
3.
4. The Convention shall
apply also to any identical or substantially similar taxes which are imposed
after the date of signature of the Convention in addition to, or in place of,
the existing taxes. The competent authorities of the Contracting States shall
notify each other of any significant changes which have been made in their
respective taxation laws.
Article
3
GENERAL
DEFINITIONS
1. For the purposes of
this Convention, unless the context otherwise requires:
a. the terms:
i.
"Kazakstan"
means the Republic of Kazakstan, and when used in a geographical sense, the
term "Kazakstan" includes the territorial waters, and also the
exclusive economic zone and continental shelf in which Kazakstan, for certain
purposes, may exercise sovereign rights and jurisdiction in accordance with
international law and in which the laws relating to Kazakstan tax are
applicable;
ii.
"India"
means the territory of India and includes the territorial sea and airspace
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. Convention on the Law of
the Sea;
a.
b. the term
"person" includes an individual, a company, a body of persons or any
other entity which is treated as a taxable unit under the taxation laws in
force in the respective Contracting States;
c. the term
"company" means any body corporate or any entity which is treated as
a body corporate for tax purposes;
d. the terms "a
Contracting State" and "the other Contracting State" mean
Kazakstan or India, as the context requires;
e. the terms
"enterprise of a Contracting State" and "enterprise of the other
Contracting State" mean respectively an enterprise carried on by a
resident of a Contracting State and an enterprise carried on by a resident of
the other Contracting State;
f. the term
"international traffic" means any transport by a ship or aircraft
operated by an enterprise which is a resident of a Contracting State, except
when the ship or aircraft is operated solely between places in the other
Contracting State;
g. the term
"competent authority" means:
i.
in
Kazakstan, the Ministry of Finance or its authorized representative;
ii.
in
India, the Central Government in the Ministry of Finance (Department of
Revenue) or their authorized representative;
a.
b.
c.
d.
e.
f.
g.
h. the term
"national" means:
i.
any
individual possessing the nationality of a Contracting State;
ii.
any
legal person, partnership or any other association deriving its status as such
from the laws in force in a Contracting State.
a.
b.
c.
d.
e.
f.
g.
h.
i. the term "fiscal
year" means:
i.
in
the case of India, "previous year" as defined under section 3 of the
Income-tax Act, 1961;
ii.
in
the case of Kazakstan, the calendar year;
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. the term
"tax" means Indian tax or Kazak tax, as the context requires, but
shall not include any amount which is payable in respect of any default or
omission in relation to the taxes to which this Convention applies or which
represents a penalty imposed relating to those taxes.
1.
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 which
it has at that time under the law of that State concerning the taxes to which
the Convention applies.
Article
4
RESIDENT
1.
For
the purposes of this Convention, the term "resident of a Contracting
State" means any person who, under the laws of that State, is liable to
tax therein by reason of his domicile, residence, place of management, place of
incorporation, or any other criterion of a similar nature.
But
this term does not include any person who is liable to tax in that State in
respect only of income from sources in that State or capital situated therein.
1.
2. Where by reason of
the provisions of paragraph 1 an individual is a resident of both Contracting
States, then his status shall be determined as follows:
a. he shall be deemed to
be a resident of the State in which he has a permanent home available to him;
if he has a permanent home available to him in both States, he shall be deemed
to be a resident of the State with which his personal and economic relations
are closer (centre of vital interests);
b. If the State in which
he has his centre of vital interests cannot be determined, or if he has not a
permanent home available to him in either State, he shall be deemed to be a
resident of the State in which he has an habitual abode;
c. if he has an habitual
abode in both States or in neither of them, he shall be deemed to be a resident
of the State of which he is a national;
d. if he is a national
of both States or of neither of them, the competent authorities of the
Contracting States shall settle the question by mutual agreement.
1.
2.
3. Where by reason of
the provisions of paragraph 1 a person other than an individual is a resident
of both Contracting States, then it shall be deemed to be a resident of the
State in which its place of effective management is situated. If the State in
which its place of effective management is situated cannot be determined, then
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 mine, an oil or gas
well, a quarry or any other place of extraction of natural resources;
g. a sales outlet;
h. a warehouse in
relation to a person providing storage facilities for others and;
i. a farm, plantation or
other place where agricultural, forestry, plantation or related activities are
carried on.
1.
2.
3. The term
"permanent establishment" also includes:
a. a building site or
construction or installation or assembly project, or supervisory activities
connected therewith, only if such site, project or activity lasts for more than
12 months, and
b. an installation or
structure used for the exploration of natural resources, or supervisory
activities connected therewith, or a drilling rig or ship used for the
exploration of natural resources, only if such use or activity lasts for more
than 12 months.
1.
2.
3.
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, display or delivery of goods or merchandise
belonging to the enterprise;
b. the maintenance of a
stock of goods or merchandise belonging to the enterprise solely for the
purpose of storage, display or delivery;
c. the maintenance of a
stock of goods or merchandise belonging to the enterprise solely for the
purpose of processing by another enterprise;
d. the maintenance of a
fixed place of business solely for the purpose of purchasing goods or
merchandise or of collecting information for the enterprise;
e. the maintenance of a
fixed place of business solely for the purpose of carrying on, for the
enterprise, any other activity of a preparatory or auxiliary character; or
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.
1.
2.
3.
4.
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 on behalf of an
enterprise of the other Contracting State and has, and habitually exercises, in
a Contracting State an authority to conclude contracts in the name of the
enterprise, that enterprise shall be deemed to have a permanent establishment
in that State in respect of any activities which that person undertakes for 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.
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 it insures risks situated therein through a
person other than an agent of an independent status to whom paragraph 7
applies.
7. An enterprise shall
not be deemed to have a permanent establishment in a Contracting State merely
because it carries on business in that State through a broker, general
commission agent or any other agent of an independent status, provided that
such, persons are acting in the ordinary course of their business. However,
when the activities of such an agent are devoted wholly or almost wholly on
behalf of that enterprise, he will not be considered an agent of an independent
status within the meaning of this paragraph.
8. The fact that a
company which is a resident of a Contracting State controls or is controlled by
a company which is a resident of the other Contracting State, or which carries
on business in that other State (whether through a permanent establishment or
otherwise), shall not of itself constitute either company a permanent
establishment of the other.
Article
6
INCOME
FROM IMMOVABLE PROPERTY
1. Income derived by a
resident of a Contracting State from immovable property (including income from
agriculture or forestry) situated in the other Contracting State may also be
taxed in that other State.
2. The term
"immovable property" shall have the meaning which it has under the
law of the Contracting State in which the property in question is situated. The
term shall in any case include property accessory to immovable property,
livestock and equipment used in agriculture and forestry, rights to which the
provisions of general law respecting landed property apply, usufruct of immovable
property and rights to variable or fixed payments as consideration for the
working of, or the right to work, mineral deposits, sources and other natural
resources; ships and aircraft shall not be regarded as immovable property.
3. The provisions of
paragraph 1 shall apply to income derived from the direct use, letting, or use
in any other form of immovable property.
4. The provisions of
paragraphs 1 and 3 shall also apply to the income from immovable property of an
enterprise and to income from immovable property used for the performance of
independent personal services.
Article
7
BUSINESS
PROFITS
1. The profits of an
enterprise of a Contracting State shall be taxable only in that State unless
the enterprise carries on business in the other Contracting State through a
permanent establishment situated therein. If the enterprise carries on business
as aforesaid, the profits of the enterprise may be taxed in the other State but
only so much of them as is attributable to that permanent establishment.
2. Subject to the
provisions of paragraph 3, where an enterprise of a Contracting State carries
on or has carried on business in the other Contracting State through a
permanent establishment situated therein, there shall in each Contracting State
be attributed to that permanent establishment the profits which it might be
expected to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions and dealing
wholly independently with the enterprise of which it is a permanent
establishment.
3. In determining the
profits of a permanent establishment, there shall be allowed as deductions
expenses which are incurred for the purposes of the permanent establishment,
including executive and general administrative expenses so incurred, whether in
the State in which the permanent establishment is situated or elsewhere, in
accordance with the provisions of and subject to the limitations of the tax
laws of that State.
The
permanent establishment shall not be allowed a deduction for amounts paid to
its head office or any of the other offices of the resident by way of royalties,
fees or other similar payment in return for the use of patents or other rights,
or by way of commission, for specific services performed or for management, or
by way of interest on moneys lent to the permanent establishment.
1.
2.
3.
4. No profits shall be
attributed to a permanent establishment by reason of the mere purchase by that
permanent establishment of goods or merchandise for the enterprise.
5. Where profits include
items of income or capital gains which are dealt with separately in other
articles of this Convention, then the provisions of those articles shall not be
affected by the provisions of this article.
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.
Article
8
SHIPPING
AND AIR TRANSPORT
1. Profits derived by an
enterprise which is a resident of a Contracting State from the operation of
ships or aircraft in international traffic shall be taxable only in that State,
2. Profits derived by a
transportation enterprise which is a resident of a Contracting State from the
use, maintenance, or rental of containers (including trailers and other
equipment for the transport of containers) used for the transport of goods or
merchandise in international traffic shall be taxable only in that Contracting
State unless the containers are used solely within the other Contracting State.
3. For the purposes of
this article, interest on funds connected with the operation of ships or
aircraft in international traffic shall be regarded as profits derived from the
operation of such ships or aircraft, and the provisions of Article 11 shall not
apply in relation to such interest. The provisions of this paragraph will,
however, not apply to interest on fixed deposits with a bank.
4. 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
Where-
a. an enterprise of a
Contracting State participates directly or indirectly in the management,
control or capital of an enterprise of the other Contracting State, or
b. the same persons
participate directly or indirectly in the management, control or capital of an enterprise
of a Contracting State and an enterprise of the other Contracting State,
and
in either case conditions are made or imposed between the two enterprises in
their commercial or financial relations which differ from those which would be
made between independent enterprises, then any profits which would, but for
those conditions, have accrued to one of the enterprises, but, by reason of
those conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly.
Article
10
DIVIDENDS
1. Dividends paid by a
company which is a resident of a Contracting State to a resident of the other
Contracting State may be taxed in that other State.
2. However, such
dividends may also be taxed in the Contracting State of which the company paying
the dividends is a resident and according to the laws of that State, but if the
recipient is the beneficial owner of the dividends the tax so charged shall not
exceed 10 per cent. of the gross amount of the dividends. This paragraph shall
not affect the taxation of the company in respect of the profits out of which
the dividends are paid.
3. The term
"dividends" as used in this article means income from shares or other
rights, not being debt-claims, participating in profits, as well as income from
other corporate rights which is subjected to the same taxation treatment as
income from shares by the laws of the State of which the company making the
distribution is a resident.
4. The provisions of
paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends,
being a resident of a Contracting State, carries on business in the other
Contracting State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs in that other
State independent personal services from a fixed base situated therein, and the
holding in respect of which the dividends are paid is effectively connected
with such permanent establishment or fixed base. In such case the provisions of
Article 7 or Article 14, as the case may be, shall apply.
5. Where a company which
is a resident of a Contracting State derives profits or income from the other
Contracting State, that other State may not impose any tax on the dividends
paid by the company, except in so far as such dividends are paid to a resident
of that other State or in so far as the holding in respect of which the
dividends are paid is effectively connected with a permanent establishment or a
fixed base situated in that other State, nor subject the company's
undistributed profits to a tax on undistributed profits, even if the dividends
paid or the undistributed profits consist wholly or partly of profits or income
arising in such other State.
6. Profits of a company
of Contracting State carrying on business in the other Contracting State
through a permanent establishment situated therein may, after having been taxed
under Article 7, be taxed on the remaining amount in the Contracting State in
which the permanent establishment is situated at a rate that does not exceed
the rate set forth in paragraph 2 of this article.
Article
11
INTEREST
1. Interest arising in a
Contracting State and paid to a resident of the other Contracting State may be
taxed in that other State.
2. However, such
interest may also be taxed in the Contracting State in which it arises and
according to the laws of that State, but if the recipient and the beneficial
owner of the interest is a resident of the other Contracting State, the tax so
charged shall not exceed' 10 per cent. of the gross amount of the interest. The
competent authorities of the Contracting States shall by mutual agreement
settle the mode of application of this limitation.
3. Notwithstanding the
provisions of paragraph 2, interest arising in a Contracting State shall be
exempt from tax in that State provided it is derived and beneficially owned
by:-
i.
the
Government, a political sub-division or a local authority of the other
Contracting State; or
ii.
the
Central Bank of the other Contracting State or any other Governmental bank or
financial institution/agency that may be mutually agreed upon between the two
Contracting States.
1.
2.
3.
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 debtor's profits, and in particular, income from
government securities and income from bonds or debentures, including premiums
and prizes attaching to such securities, bonds or debentures. Penalty charges
for late payment shall not be regarded as interest for the purpose of this
article.
5. The provisions of
paragraphs 1 and 2 shall not apply if the beneficial owner of the interest,
being a resident of a Contracting State, carries on business in the other
Contracting State in which the interest arises, through a permanent
establishment situated therein, or performs in that other State independent
personal services from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively connected with such
permanent establishment or fixed base. In such case the provisions of Article 7
or Article 14, as the case may be, shall apply.
6. Interest shall be
deemed to arise in a Contracting State when the payer is that State itself, a
political sub-division, a local authority or a resident of that State. Where,
however, the person paying the interest, whether he is a resident of a
Contracting State or not, has in a Contracting State a permanent establishment
or a fixed base in connection with which the indebtedness on which the interest
is paid was incurred and such interest is borne by such permanent establishment
or fixed base, then such interest shall be deemed to arise in the State in
which the permanent establishment or fixed base is situated.
7. Where, by reason of a
special relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would have been
agreed upon by the payer and the beneficial owner in the absence of such
relationship, the provisions of this article shall apply only to the
last-mentioned amount. In such a case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State, due regard
being had to the other provisions of this Convention.
Article
12
ROYALTIES
AND FEES FOR TECHNICAL SERVICES
1. Royalties or fees for
technical services arising in a Contracting State and paid to a resident of the
other Contracting State may be taxed in that other State.
2. However, such
royalties or fees for technical services may also be taxed in the Contracting
State in which they arise, and according to the laws of that State, but if the
recipient is the beneficial owner of the royalties or fees for technical
services, the tax so charged shall not exceed 10 per cent. of the gross amount
of the royalties or fees for technical services.
3.
a. The term
"royalties" as used in this article means payments of any kind
received as a consideration for the use of, or the right to use, any copyright
of literary, artistic or scientific work including software, cinematograph
films, any patent, trade mark, design or model, plan, secret formula or
process, or for information concerning industrial, commercial or scientific
experience, and payments for the use of, or the right to use, industrial,
commercial, or scientific equipment;
b. the term "fees
for technical services" means payment of any kind in consideration for the
rendering of any managerial, technical or consultancy services including the
provision of services by technical or other personnel but does not include
payments for services mentioned in Articles 14 and 15 of this Convention.
1.
2.
3.
4. The provisions of
paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties,
being a resident of a Contracting State, carries on business in the other
Contracting State in which the royalties 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 are paid is effectively connected with such permanent
establishment or fixed base. In such a case the provisions of Article 7 or
Article 14, as the case may be, shall apply.
5. Royalties and fees
for technical services shall be deemed to arise in a Contracting State when the
payer is that State itself, a political sub-division, a local authority or a
resident of that State. Where, however, the person paying the royalties or fees
for technical services, whether he is a resident of a Contracting State or not,
has in a Contracting State a permanent establishment or a fixed base in connection
with which the liability to pay the royalties or fees for technical services
was incurred, and such royalties or fees for technical services are borne by
such permanent establishment or fixed base, then such royalties or fees for
technical services shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
6. Where, by reason of a
special relationship between the payer and the beneficial owner or between both
of them and some other person, the amount of the royalties or fees for
technical services, having regard to the use, right or information for which
they are paid, exceeds the amount which would have been agreed upon by the
payer and the beneficial owner in the absence of such relationship, the
provisions of this article shall apply only to the last-mentioned amount. In
such case, the excess part of the payments shall remain taxable according to
the laws of each Contracting State, due regard being had to the other
provisions of this Convention.
Article
13
CAPITAL
GAINS
1. Gains derived by a
resident of a Contracting State from the alienation of immovable property
referred to in Article 6 and situated in the other Contracting State may be
taxed in that other State.
2. Gains from the
alienation of movable property forming part of the business property of a
permanent establishment which an enterprise of a Contracting State has in the
other Contracting State or of movable property pertaining to a fixed base
available too 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 Contracting State from the alienation of ships or aircraft operated
in international traffic or movable property pertaining to the operation of
such ships, or aircraft, shall be taxable only in that Contracting State.
4. Gains from the alienation
of shares of the capital stock of a company the property of which consists
directly or indirectly principally of immovable property situated in a
Contracting State may be taxed in that State.
5. Gains from the
alienation of shares other than those mentioned in paragraph 4 of a company
which is a resident of a Contracting State may be taxed in that State.
6. Gains from the
alienation of any property other than that referred to in the preceding
paragraphs shall be taxable only in the Contracting State of which the
alienator is a resident.
Article
14
INDEPENDENT
PERSONAL SERVICES
1. Income derived by a
resident of a Contracting State in respect of professional services or other
activities of an independent character shall be taxable only in that State
except in the following circumstances, when such income may also be taxed in
the other Contracting State:-
a. if he has a fixed
base regularly available to him in the other Contracting State for the purpose
of performing his activities; in that case, only so much of the income as is
attributable to that fixed base may be taxed in that other State or;
b. if his stay in the
other State is for a period or periods aggregating 183 days or more in any
12-month period commencing or ending in the fiscal year concerned; in that case,
only so much of the income as is derived from his activities performed in that
other State may be taxed in that other State.
1.
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.
2.Article 15
DEPENDENT
PERSONAL SERVICES
1. Subject to the
provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration
derived by a resident of a Contracting State in respect of an employment shall
be taxable only in that State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such remuneration as is
derived therefrom may be taxed in that other State.
2. Notwithstanding the
provisions of paragraph 1, remuneration derived by a resident of a Contracting
State in respect of an employment exercised in the other Contracting State
shall be taxable only in the first-mentioned State if:-
a. the recipient is
present in the other State for a period or periods not exceeding in the
aggregate 183 days in any 12-month period commencing or ending in the fiscal
year concerned, and
b. the remuneration is
paid by, or on behalf of, an employer who is not a resident of the other State,
and
c. the remuneration is
not borne by a permanent establishment or a fixed base which the employer has
in the other State.
3. Notwithstanding the
preceding provisions of this article, remuneration derived in respect of an
employment exercised aboard a ship or aircraft operated in international
traffic, may be taxed in the Contracting State in which the enterprise
operating the ship or aircraft is a resident.
Article
16
DIRECTORS'
FEES
Directors'
fees and other similar payments derived by a resident of a Contracting State in
his capacity as a member of the board of directors or a similar body of a
company which is a resident of the other Contracting State may also be taxed in
that other State.
Article
17
ARTISTES
AND SPORTSPERSONS
1. Notwithstanding the
provisions of Articles 14 and 15, the 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. The provisions of
paragraphs 1 and 2, shall not apply to income from activities performed in a
Contracting State by entertainers or sportspersons if the visit to that State
is substantially supported by public funds of one or both of the Contracting
States or of political sub-divisions or local authorities thereof. In such a
case, the income is taxable only in the Contracting State of which the
entertainer or sportsperson is a resident.
Article
18
PENSIONS
AND OTHER PAYMENTS
1. 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 and any annuity paid to such a resident shall be taxable only in
that State.
2. The term
"annuity" means a stated sum payable to an individual periodically at
stated times during his life or during a specified or ascertainable period of
time under an obligation to make the payments in return for adequate and full
consideration in money or money's worth.
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.
1.
2.
a. Any pension paid by,
or out of funds created by, a Contracting State or a political sub-division or
a local authority thereof to an individual in respect of services rendered to
that State or sub-division or authority shall be taxable only in that State.
b. However, such pension
shall be taxable only in the other Contracting State if the individual is a
resident of, and a national of, that State.
1.
2.
3. The provisions of Articles
15, 16 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 Contracting State or a political sub-division or a local
authority thereof.
Article
20
STUDENTS
AND APPRENTICES
1. A student or business
apprentice who is or was a resident of a Contracting State immediately before
visiting the other Contracting State and who is present in that other
Contracting State solely for the purpose of his education or training shall,
besides grants, loans and scholarships, be exempt from tax in that other State
on:-
a. payments made to him
by persons residing outside that other State for the purposes of his
maintenance, education or training; and
b. remuneration from
employment in that other State for an amount not exceeding the amount which is
exempt from tax under the laws of that other Contracting State for any fiscal
year,
as the case may be, provided that such employment is directly related to his
studies or is undertaken for the purpose of his maintenance.
1.
2. The benefit of this
article shall extend only for such period of time as may be reasonably or
customarily required to complete the education or training undertaken, but in
no event shall any individual have the benefit of this article for more than
seven consecutive years from the date of his first arrival in that other
Contracting State.
Article
21
PROFESSORS,
TEACHERS AND RESEARCH SCHOLARS
1. A professor or
teacher who is or was a resident of a Contracting State immediately before
visiting the other Contracting State for the purpose of teaching or engaging in
research, or both, at a university,' college, school or other approved
institution in that other Contracting State shall be exempt from tax in that
other State on any remuneration for such teaching or research for a period not
exceeding two years from the date of his arrival in that other State.
2. This article shall
not apply to income from research, if such research is undertaken primarily for
the private benefit of a specific person or persons.
3. For the purposes of
this article and Article 20, an individual shall be deemed to be a resident of
a Contracting State if he is resident in that State in the fiscal year in which
he visits the other Contracting State or in the immediately preceding fiscal
year.
4. For the purposes of
paragraph 1 "approved institution" means an institution which has
been approved in this regard by the competent authority of the concerned State.
Article
22
OTHER
INCOME
1. Items of income of a
resident of a Contracting State, wherever arising, not dealt with in the
foregoing articles of this Convention shall be taxable only in that State.
2. The provisions of
paragraph I 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 or
any sort of gambling or betting of any form or nature whatsoever, such income
may be taxed in the other Contracting State.
Article
23
CAPITAL
1. Capital represented
by immovable property referred to in Article 6, owned by a resident of a
Contracting State and situated in the other Contracting State may be taxed in
that other State.
2. Capital represented.
by movable property forming part of the business property of a permanent establishment
which an enterprise of a Contracting State has in the other Contracting State
or by movable property pertaining to a fixed base available to a resident of a
Contracting State in the other Contracting State for the purpose of performing
independent personal services, may also be taxed in that other State.
3. Capital represented
by ships and aircraft operated in international traffic, and by movable
property pertaining to the operation of such ships or aircraft, shall be
taxable only in that Contracting State in which the enterprise operating such
ships or aircraft is a resident.
Article
24
ELIMINATION
OF DOUBLE TAXATION
1. The law in force in
either of the Contracting States will continue to govern the taxation of income
in the respective Contracting States except where provisions to the contrary
are made in this Convention.
2. In the case of
Kazakstan, double taxation shall be avoided as follows:-
a. Where a resident of
Kazakstan derives income or owns capital which, in accordance with the
provisions of this Convention, may be taxed in India, Kazakstan shall allow:-
i.
as
a deduction from the tax on the income of that resident, an amount equal to the
income-tax paid in India;
ii.
as
a deduction from the tax on capital of that resident, an amount equal to the
tax on capital paid in India.
The
amount of the tax to be deducted pursuant to the above provision shall not
exceed the tax which would have been charged on the same income in Kazakstan
under the rates applicable thereon.
1.
2.
3. In the case of India,
double taxation shall be avoided as follows:-
a. Where a resident of
India derives income or owns capital which, in accordance with the provisions
of this Convention, may be taxed in Kazakstan, India shall allow:-
i.
as
a deduction from the tax on the income of that resident, an amount equal to the
income-tax paid in Kazakstan;
ii.
as
a deduction from the tax on capital of that resident, an amount equal to the
tax on capital paid in Kazakstan.
The
amount of the tax to be deducted pursuant to the above provision shall not
exceed the tax which would have been charged on the same income in India under
the rates applicable thereon.
1.
2.
3.
4. Income or capital
which, in accordance with the provisions of this Convention, is not to be
subjected to tax in a Contracting State may be taken into account for
calculating the rate of tax to be imposed in that Contracting State.
5. The tax paid in a
Contracting State shall be deemed to include the tax which would have been paid
but for any exemption or reduction of tax granted under incentive provisions
contained in the law of that Contracting State designed to promote economic
development to the extent that such exemption or reduction is granted for
profits from industrial or manufacturing activities or from agriculture,
fishing or tourism (including restaurants and hotels) provided that the
activities have been carried out within that Contracting State.
Article
25
NON-DISCRIMINATION
1. Nationals of a
Contracting State shall not be subjected in the other Contracting State to any
taxation or any requirement connected therewith, which is other or more
burdensome than the taxation and connected requirements to which nationals of
that other State in the same circumstances, are or may be subjected. This
provision shall, notwithstanding the provisions of Article 1, also apply to
persons who are not residents of one or both the Contracting States.
2. The taxation on a
permanent establishment which an enterprise of a Contracting State has in the
other Contracting State shall not be less favourably levied in that other State
than the taxation levied on enterprises of that other State carrying on the same
activities. This provision shall not be construed as preventing a Contracting
State from charging the profits of a permanent establishment which a company of
the other Contracting State has in the first-mentioned State at a rate of tax
which is higher than that imposed on the profits of a similar company of the
first-mentioned Contracting State, nor as being in conflict with the provisions
of paragraph 3 of Article 7 of this Convention.
3. Enterprises of a
Contracting State, the capital of which is wholly or partly owned or
controlled, directly or indirectly, by one or more residents of the other
Contracting State, shall not be subjected in the first-mentioned State to any
taxation or any requirement connected therewith which is other or more
burdensome than the taxation and connected requirements to which other similar
enterprises of the first-mentioned State are or may be subjected.
4. Except where the
provisions 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, any debts of an enterprise of a Contracting
State to a resident of the other Contracting State shall, for the purpose of
determining the taxable capital of such enterprise, be deductible under the
same conditions as if they had been contracted to a resident of the
first-mentioned State.
5. The provisions of
this article shall, notwithstanding the provisions of Article 2, apply to taxes
of every kind and description.
Article
26
MUTUAL
AGREEMENT PROCEDURE
1. Where a person
considers that the actions of one or both of the Contracting States result or
will result for him in taxation not in accordance with the provisions of this
Convention, he may, Irrespective of the remedies provided by the domestic law
of those States, present his case to the competent authority of the Contracting
State of which he is a resident or, if his case comes under paragraph 1 of
Article 25, to that of the Contracting State of which he is a national. The
case must be presented within three years from the first notification of the
action resulting in taxation not in accordance with the provisions of the
Convention.
2. The competent
authority shall endeavour, if the objection appears to it to be justified and
if it is not itself able to arrive at a satisfactory solution, to resolve the
case by mutual agreement with the competent authority of the other Contracting
State, with a view to the avoidance of taxation which is not in accordance with
the Convention. Any agreement reached shall be implemented notwithstanding any
time limits in the domestic law of the Contracting State.
3. The competent
authorities of the Contracting States shall endeavour to resolve by mutual
agreement any difficulties or doubts arising as to the interpretation or
application of the Convention. They may also consult together for the
elimination of double taxation in cases not provided for in the Convention.
4. The competent
authorities of the Contracting States may communicate with each other directly
for the purpose of reaching an agreement in the sense of the preceding
paragraphs. When it seems advisable in order to reach agreement to have an oral
exchange of opinions, such exchange may take place through a Commission
consisting of representatives of the competent authorities of the Contracting
States.
Article
27
EXCHANGE
OF INFORMATION
1. The competent
authorities of the Contracting States shall exchange such information
(including documents) as is necessary for carrying out the provisions of this
Convention or of the domestic laws of the Contracting State concerning taxes
covered by the Convention, in so far as the taxation thereunder is not contrary
to the Convention in particular for the prevention of fraud or evasion of such
taxes. The exchange of information is not restricted by Article 1. Any
information received by a Contracting State shall be treated as secret in the
same manner as information obtained under the domestic laws of that State and
shall be disclosed only to persons or authorities (including courts and
administrative bodies) involved in the assessment or collection of, the
enforcement or prosecution in respect of, or the determination of appeals in
relation to, the taxes covered by the Convention. Such persons or authorities
shall use the information only for such purposes. They may disclose the
information in public court proceedings or in judicial decisions.
2. In no case shall the
provisions of paragraph 1 be construed so as to impose on a Contracting State
the obligation:-
a. to carry out
administrative measures at variance with the laws or administrative practice of
that or of the other Contracting State;
b. to supply information
or documents which is 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 (ordre public).
Article
28
ASSISTANCE
IN COLLECTION
1. The Contracting
States undertake to lend assistance to each other in the collection of taxes to
which this Convention relates together with interest, costs, and civil
penalties relating to such taxes, referred to in this article as a
"revenue claim".
2. Request for
assistance by the competent authority of a Contracting State in the collection
of a revenue claim shall include a certification by such authority that, under
the laws of that State, the revenue claim has been finally determined. For the
purposes of this article, a revenue claim is finally determined when a
Contracting State has the right under its internal law to collect the revenue
claim and the taxpayer has no further rights to restrain collection.
3. Amounts collected by
the competent authority of a Contracting State pursuant to this article shall
be forwarded to the competent authority of the other Contracting State.
However, the first-mentioned Contracting State shall be entitled to
reimbursement of costs, if any, incurred in the course of rendering such
assistance to the extent mutually agreed between the competent authorities of
the two States.
4. Nothing in this
article shall be construed as imposing on either Contracting State the
obligation to carry out administrative measures of a different nature from
those which are used in the collection of its own taxes or those which would be
contrary to its public policy (ordre public).
Article
29
MEMBERS
OF DIPLOMATIC MISSIONS AND CONSULAR POSTS
Nothing
in this Convention shall affect 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, the
completion of the procedure required by the respective laws for the entry into
force of this Convention. This Convention shall enter into force thirty days
after the receipt of the latter of the notifications.
2. The provisions of
this Convention shall have effect:-
a. in India, in respect
of income derived or capital held 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 Kazakstan in
respect of income derived or capital held in any fiscal year beginning on or
after the first day of January next following the calendar year in which the
Convention enters into force.
Article
31
TERMINATION
This
Convention shall remain in force indefinitely until terminated by one of the
Contracting States. Either Contracting State may terminate the Convention,
through diplomatic channels, by giving notice of termination at least six
months before the end of any calendar year after the expiry of five years from
the date of entry into force of the Convention. In such event, the Convention
shall cease to have effect:-
a. in India, in respect
of income arising in any previous year on or after the first day of April next
following the calendar year in which the notice is given and in respect of
capital which is held at the expiry of any previous year beginning on or after
the first day of April next following the calendar year in which the notice of
termination is given; and
b. in Kazakstan, in
respect of income arising in any fiscal year on or after the first day of
January next following the calendar year in which the notice is given and in
respect of capital which is held at the expiry of any fiscal year beginning on
or after the first day of January next following the calendar year in which the
notice of termination is given.
In
witness whereof, the undersigned, being duly authorized thereto, have signed
this Convention.
Done
in duplicate at New Delhi, this 9th day of December, 1996, in the Hindi, Kazak,
Russian and English languages, all texts being equally authentic. In case of
divergence between the texts, the English text shall prevail.
Sd.)
(P. Chidambaram) (Sd.) (A. Esimov)
For
the Government of the For the Government of the
Republic
of India