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
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 ".)
a.
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.
1.
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.
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
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.
1.
2.
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.
1.
2.
3.
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.
1.
2.
3.
4.
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.
1.
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.
1.
2.
3.
4.
5.
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.
1.
2.
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.
1.
2.
3.
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.
1.
2.
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.
a.
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
non-commercial 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.
1.
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.
1.
2.
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