TMI BlogConvention between Republic of India and the Kingdom of Netherlands u/s 90X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1969) and section 44A of the Wealth-tax Act, 1957 (27 of 1957), had directed that all the provisions of the said Convention annexed to the notification of the Government of India in the Ministry of Finance (Department of Revenue) (Foreign Tax Division) number G.S.R. 382(E), dated the 27th March, 1989 [published at (1989) 77 CTR (St) 80], shall be given effect to in the Union of India. And whereas Article IV of the Protocol dated the 30th July, 1988, to the aforesaid Convention provides that if after the signature of the aforesaid Convention under any convention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that the following modifications shall be made in the Convention notified by the said notification which are necessary for implementing the aforesaid Convention between India and Netherlands, namely; 1. With effect from 1st April, 1997, for the existing paragraph 2 of Article 10 relating to Dividends the following paragraph shall be read : "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. " II. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of the royalties or fees for technical services as defined in this Article, where the payer of the royalties or fees is the Government of that Contracting State, a political sub-division or a public sector company; and (B) 20 per cent of the gross amount of the royalties or fees for technical services in all other cases; and ( ii ) during the subsequent years, 15 per cent of the gross amount of royalties or fees for technical services; and ( b ) in the case of royalties referred to in sub-paragraph ( b ) of paragraph 4 and fees for technical services as defined in this Article that are ancillary and subsidiary to the enjoyment of the property for which payment is received under paragraph 4( b ) of this Article, 10 per cent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knowledge, experience, skill, know-how or processes, or consist of the development and transfer of a technical plan or technical design. 6. Notwithstanding paragraph 5, "fees for technical services" does not include amounts paid : ( a ) for services that are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale of property other than a sale described in paragraph 4( a ) ; ( b ) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operation of ships or aircraft in international traffic; ( c ) for teaching in or by educational institutions; ( d ) for services for the personal use of the individual or individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 9. 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 royalties or fees for technical services, having regard to the royalties or fees for technical services 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 payment shall remain taxable according to the laws of each State, due regard being h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax so charged shall not exceed 10 per cent of the gross amount of the royalties or the fees for technical services. " VI. With effect from 1st April, 1998, for paragraph 4 of Article 12 relating to Royalties and Fees for Technical Services referred to in paragraph III above the following paragraph shall be read : "4. 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, any patent, trade-mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience." VII. The Memorandum of Understanding and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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