Article 31 - Termination - United Kingdom Great Britain and Northern Ireland (UK)

ARTICLE 31 TERMINATION This Convention shall remain in force until terminated by one of the Contracting State. Either Contracting State may terminate the Convention, through the diplomatic channel, by giving notice of termination at least six months before the end of any calendar year beginning after the expiration of ten years from the date of entry into force of the Convention. In such event, the Convention shall cease to have effect; (a) in the United Kingdom ; (i) in respect of income-tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given; (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the notice is given; (iii) in respect of petroleum revenue tax, for any chargeable period beginning on or after 1st January in the calendar year next following that in which the notice is given; (b) in India, in respect of income arising in any fiscal year beginning on or after the first day of April next following the calendar year in which the notice given. In witness whereof the undersigned, duly authorised thereto by their respective Governments, have signed this Convention. Done on this 25th day of January, 1993, in New Delhi on two original copies each in the Hindi and English languages, both text being equally authentic. In case of divergence between the two texts, the English text shall be the operative one. British high commission New Delhi, January 25, 1993 Your Excellency : I have the honour to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland 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 capital gains which has been signed today and to propose on behalf of the Government of the United Kingdom of Great Britain and Northern Ireland : (a) that, in applying sub-paragraph (j) of paragraph 2 of Article 5, for the purpose of determining whether a building site or construction installation or assembly project or supervisory activity in connection therewith has continued for a period of more than six months, the Contracting States shall : (i) take no account of time previously spent by employees of the enterprise on other sites or projects which have no connection with the site or project in question ; (ii) apply for more than six months test separately to each site or project which has no connection with any other site or project and to each group of connected sites or projects; and (iii) regard a building site as a single site, even if several contracts have been entered into for the work being done, provided that if forms a coherent whole commercially and geographically; (b) that, in applying paragraph 3 of Article 7, for the purpose of determining whether a permanent establishment has taken an active part in negotiating, concluding or fulfilling contracts entered into by the enterprise, the Contracting States shall take into considerations all relevant circumstances and, in particular, the fact that a contract or order relating to the purchase or provision of goods or services was negotiated or placed with the head office of the enterprise, rather than with the permanent establishment, shall not preclude them from determining that the permanent establishment did take an active part in negotiating, concluding or fulfilling that contract; (c) that, in applying paragraph 1 of Article 8, for the purpose of determining the profits of an enterprise which are derived from the operation of aircraft in international traffic, the Contracting States shall treat interest from the investment or deposit of receipt arising directly from the operation of aircraft in international traffic as being included in those profits, but shall not treat interest derived from the reinvestment of such interest as being so included. If the foregoing proposal is acceptable to the Government of the Republic of India I have the honour to suggest that the present Note and Your Excellencys reply to that effect should be regarded as constituting an agreement between the two Governments in this matter. I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration. His Excellency Mr. S. Ramamurti, (Nicholas Fenn) Chairman, High Commissioner Central Board of Direct Taxes, Ministry of Finance, Government of India, New Delhi GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) CENTRAL BOARD OF DIRECT TAXES NEW DELHI, JANUARY 25, 1993 Your Excellency : I have the honour to acknowledge receipt of Your Excellencys Note of today which reads as follows : I have the honour to refer to the Convention between the Government of the United Kingdom of Great Britain and Northern Ireland 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 capital gains which has been signed today and to propose on behalf of the Government of the United Kingdom of Great Britain and Northern Ireland : (a) that, in applying sub-paragraph (j) of paragraph 2 of Article 5, for the purpose of determining whether a building site or construction, installation or assembly project or supervisory activity in connection therewith has continued for a period of more than six months, the Contracting States shall : (i) take no account of time previously spent by employees of the enterprise on other sites or projects which have no connection with the site or project in question; (ii) apply more than six months test separately to each site or project which has no connection with any other site or project and to each group of connected sites or projects; and (iii) regard a building site as a single site, even if several contracts have been entered into for the work being done, provided that it forms a coherent whole commercially and geographically; (b) that, in applying paragraph 3 of Article 7, for the purpose of determining whether a permanent establishment has taken an active part in negotiating, concluding or fulfilling contracts entered into by the enterprise, the Contracting States shall take into consideration all relevant circumstances and, in particular, the fact that a contract or order relating to the purchase or provision of goods or services was negotiated or placed with the head office of the enterprise, rather than with the permanent establishment, shall not preclude them from determining that the permanent establishment did take an active part in negotiating, concluding or fulfilling that contract; (c) that, in applying paragraph 1 of Article 8, for the purpose of determining the profits of an enterprise which are derived from the operation of aircraft in international traffic, the Contracting States shall treat interest derived from the investment or deposit of receipts arising directly from the operation of aircraft in international traffic as being included in those profits, but shall not treat interest derived from the reinvestment of such interest as being so included. If the foregoing proposal is acceptable to the Government of the Republic of India have the honour to suggest that the present Note and Your Excellencys reply to that effect should be regarded as constituting an agreement between the two Government in this matter. In reply, I have the honour to state that the Government of the Republic of India accepts the proposal made therein and agrees that Your Excellencys Note and the present reply shall constitute an agreement between the Government of Republic of India and the Government of the United Kingdom of Great Britain and Northern Ireland in this matter. I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration. (S. Ramamurti) Chairman Central Board of Direct Taxes India. His Excellency Sir Nicholas Fenn, KCMG British High Commission in India, New Delhi