TMI BlogDouble Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - With IrelandX X X X Extracts X X X X X X X X Extracts X X X X ..... erred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India. Annexure Convention between the Government of the Republic of India and the Government of Ireland For the Avoidance of Double Taxation and for the Prevention of Fiscal Evasion with respect to taxes on Income and Capital Gains The Government of the Republic of India and the Government of Ireland, desiring to conclude a Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income and capital gains and with a view to promoting economic co-operation 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 and capital gains 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 capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic 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; (g) the term competent authority means : (i) in the case of India : the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative; (ii) in the case of Ireland : the Revenue Commissioners or their authorised representative; (h) the term national means : (i) in relation to Ireland, any citizen of Ireland and any legal person, association or other entity deriving its status as such from the laws in force in Ireland; (ii) in relation to India (A) any individual possessing the nationality of India; (B) any legal person, partnership or association deriving its status as such from the laws in force in India; (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 Ireland, a year beginning with the sixth day of April in one year and ending with the fifth day of April in the following year; (j) the term tax means Indian tax or Irish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities 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 or exploration of natural resources; (g) an installation or structure used for the exploration or exploitation of natural resources; (h) a sales outlet; (i) a warehouse in relation to a person providing storage facilities for others; and (j) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on. 3. A building site or construction or assembly project or supervisory activities in connection therewith constitute a permanent establishment only if such site, project or activity last more than six months. 4. An enterprise shall be deemed to have a permanent establishment in a Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods or merchandise on behalf of the enterprise; or (c) habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself or for the enterprise and other enterprises controlling, controlled by, or subject to the same control as that enterprise. 7. 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 insures risks situated therein through a person other than an agent of an independent status to whom paragraph 8 applies. 8. 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, if the activities of such an agent are carried out wholly or almost wholly for the enterprise and the conditions made or imposed between them in their commercial and financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 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, whether in the State in which the permanent establishment is situated or elsewhere. Executive and general administrative expenses shall be allowed as deductions in accordance with the taxation laws of that State. Nothing in this paragraph shall, however, authorise a deduction for expenses which would not be deductible if the permanent establishment were a separate enterprise. 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. For the purposes of the preceding paragraphs, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the profits of that enterprise and taxed accordingly. 2. Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other. Article 10 : DIVIDENDS - 1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contacting 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Contracting State provided it is derived and beneficially owned by, or derived in connection with a loan or credit extended, guaranteed or insured by: (a) the Government, a political sub-division, a statutory body or a local authority of the other Contracting State; or (b) (i) in the case of India, the Reserve Bank of India, the Industrial Finance Corporation of India, the Industrial Development Bank of India, the Export-Import Bank of India, the National Housing Bank, the Small Industries Development Bank of India and the Industrial Credit and Investment Corporation of India (ICICI); and (ii) in the case of Ireland, the Central Bank of Ireland; or (c) any other similar institution as may be agreed from time to time between the Competent Authorities of the Contracting States. 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, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, 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 cinematograph films or films or tapes for radio or television broadcasting, 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, other than an aircraft, or for information concerning industrial, commercial or scientific experience; (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 Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to 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 also be taxed in that other State. 3. Gains derived by an enterprise of a 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 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 in a company which is a resident of a Contracting State may be taxed in that Contracting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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