TMI BlogSection 90 of the Income-tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with foreign countries - With SloveniaX X X X Extracts X X X X X X X X Extracts X X X X ..... e given effect to in the Union of India. Annexure Convention between the Government of the Republic of India and the Government of the Republic of Slovenia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on Income The Government of the Republic of Slovenia and the Government of the Republic of India, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and with a view to promoting economic cooperation between the two countries, 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 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 all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property and taxes on the total amounts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; ( g ) the term international traffic means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; ( h ) the term competent authority means : ( i ) in Slovenia : the Ministry of Finance of the Republic of Slovenia or its authorized representative; ( ii ) in India : the Central Government in the Ministry of Finance (Department of Revenue) or their authorized representative; ( i ) the term national means : ( i ) any individual possessing the nationality of a Contracting State; ( ii ) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State. 2. As regards the application of the Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Convention applies. Article 4 : Resident - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, ( h ) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on, and ( i ) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. 3. A building site or construction, installation or assembly project constitutes a permanent establishment only if it lasts more than twelve months. 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered an agent of an independent status within the meaning of this paragraph unless the transactions are at arms length. 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 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 agricultural 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. Article 8 : Shipping and air transport - 1. Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State. 2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident. 3. For the purposes of this Article, profits from the operation of ships or aircraft in international traffic shall mean the profits derived by an enterprise referred to in paragraph 1 from transportation by sea or air of passengers, livestock or goods. 4. Profits derived by an enterprise referred to in paragraph 1 shall also include profits from the use, maintenance or rental of containers used for the transport of goods or merchandise in international traffic. 5. For the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds 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 : ( a ) 5 per cent of the gross amount of the dividends if the beneficial owner is a company which holds directly at least 10 per cent of the capital of the company paying the dividends; ( b ) 15 per cent of the gross amount of the dividends in all other cases. 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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m a fixed base situated therein, and the right or property in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. 6. 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. 7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State: ( a ) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or ( b ) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any period of 12 months; in that case, only so much of the Income as is derived from his activities performed in that other State may be taxed in that other State. 2. The term professional services includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, surgeons, dentists and accountants. Article 15 : Dependent personal services - 1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries, wages and other similar remu-neration derived by a resident of a Contracting State in respect of an employment s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted 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 shall be taxable only in the Contracting State of which the entertainer or sportsperson is a resident. Article 18 : Pensions - Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. Article 19 : Government service - 1. ( a ) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that State or sub-division or authority shall be taxable only in that State. ( b ) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: ( i ) is a national of that State; or ( ii ) did not become a resident of that State solely for the purpose of rendering the services. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of time as may be reasonable or customarily required to complete the education or training undertaken, but in no event shall any individual have the benefits of this Article, for more than five consecutive years from the date of his first arrival in that other 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 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the receipt 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of 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 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. 3. Except where the provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, or paragraph 7 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. 4. Enterprises of a Contracting State, the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etent authorities of the Contracting States. Article 26 : Exchange of information - 1. The competent authorities of the Contracting States shall exchange such information (including documents or certified copies of the documents) as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the calendar year in which the notice of termination is given. In witness whereof the Plenipotentiaries of the two Contracting States, duly authorized thereto, have signed this Convention. Done in duplicate at Ljubljana on this 13th day of January, 2003, in the Slovenian, Hindi and English languages, all the texts being equally authentic. In case of divergence among the texts, the English text shall be the operative one. Protocol At the moment of signing the Convention between the Government of the Republic of Slovenia and the Government of the Republic of India for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income, the Plenipotentiaries of the two Contracting States, duly authorized thereto, have agreed that the following provisions shall form an integral part of the Convention: The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where the provisions to the contrary are made in this Convention. 1. With reference to Articles 3 and 23: ( a ) The term tax means Slovenian or Indian tax, as the context require ..... X X X X Extracts X X X X X X X X Extracts X X X X
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