TMI BlogConvention between the Government of the Republic of India and the Government of the Hashemite Kingdom of Jordon for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income u/s 90X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the powers conferred 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 THE HASHEMITE KINGDOM OF JORDAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Hashemite Kingdom of Jordan 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 subdivisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; ( f ) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise which is a resident 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 India : the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative; ( ii ) in Jordan : the Minister of Finance or his authorised representative; ( h ) 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; ( 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 Jordan "the year" as defined in Article 2 of the Income-tax Law (57 of 1985); ( j ) the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te in which its place of effective management is situated cannot be determined, then the competent authorities 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 exploration, exploitation or extraction of natural resources; ( g ) a sales outlet; ( h ) a warehouse in relation to a person providing storage facilities for others; and ( i ) 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 installation 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 enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will not be considered an agent of an independent status within the meaning of this paragraph. 9. 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. Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of and subject to the limitation of the tax laws of that State. 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, the profits to be attributed to the permanent establishment shall be determined by the same method, year by year unless there is good and sufficient reason to the contrary. 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 this Article. ARTICLE 8 Shipping and Air Transport 1. Profits derived by an enterprise of a Contracting State from the operation by that enterprise of ships or aircraft in international traffic shall be taxable only in that State. 2. For the purposes of this Article, profits, from the operation of ships or aircraft in international traffic shall mean profits derived by an en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprises 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. 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per cent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement 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 State provided it is derived and beneficially owned by : ( i ) the Government, a political subdivision or a local authority of the other Contracting State, or ( ii ) the Central Bank of the other Contracting State, or any other bank or Governmental financial institutions/agencies that may be mutually agreed upon between the two 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, income from Government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyalties or fees for technical services, the tax so charged shall not exceed 20 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, and films or tapes or any other means of reproduction for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or any industrial, commercial or scientific equipment, 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 Articles 14 and 15 of this Convention. 4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services being a resident of a Contracting State, carries on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 any property other than that referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the Contracting State of which the alienator is a resident, provided that such resident is subject to tax thereon in that State. If the resident is not subject to tax thereon, then such gains may be taxed in the other Contracting State. ARTICLE 14 Indepen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated by an enterprise which is a resident of a Contracting State in international traffic shall be taxable only in that Contracting State. ARTICLE 16 Directors' fees Directors' fees and other 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 also be taxed in that other State. ARTICLE 17 Artistes and Sportsmen 1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Contracting State or a political subdivision or a local authority thereof. ARTICLE 20 Students and Apprentices 1. A student or business apprentice who is or was a resident of a Contracting State immediately before visiting the other Contracting State and who is present in that other Contracting State solely for the purpose of his education or training shall be exempt from tax in that other State on : ( a ) payments made to him by persons residing outside that other State for the purposes of his maintenance, education or training, and ( b ) remuneration from employment in that other State, in an amount not exceeding US $ 500 or its equivalent amount during any fiscal year, as the case may be, provided that such employment is directly related to his studies or is undertaken for the purpose of his maintenance. 2. The benefit of this Article shall extend only for such 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 Contracting State. ARTICLE 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he laws in force in either of the Contracting State will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Convention. 2. In the case of India double taxation shall be eliminated as follows : Where a resident of India derives income which, in accordance with the provisions of this Convention, may be taxed in Jordan, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Jordan whether directly or by deduction at source. Such amount shall not however exceed that part of the income-tax, as computed before the deduction is given, which is attributable to the income which may be taxed in Jordan. 3. In the case of Jordan, double taxation shall be eliminated as follows: Where a resident of Jordan derives income which, in accordance with the provisions of this Convention, may be taxed in India, Jordan shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in India. Such deduction shall not however exceed that part of the income-tax as computed before the deduction is given wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall, 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. 5. The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description which are the subject of this Convention. ARTICLE 25 Mutual Agreement Procedure 1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with provisions of the Convention. 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 a satisfactory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tracting State; ( b ) to supply information or documents which is 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. ARTICLE 27 Collection Assistance 1. The Contracting States undertake to lend assistance to each other in the collection of taxes to which this Convention relates, together with interest, costs, and civil penalties relating to such taxes, referred to in this Article as a " revenue claim". 2. Request for assistance by the competent authority of a Contracting State in the collection of a revenue claim shall include a certification by such authority that, under the laws of that State, the revenue claim has been finally determined. For the purposes of this Article, a revenue claim is finally determined when a Contracting State has the right under its internal law to collect the revenue claim and the taxpayer has no further rights to restrain collection. 3. Amounts collected by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income arising in any previous year on or after the first day of January next following the calendar year in which the notice is given. In witness whereof the undersigned, being duly authorised thereto, have signed this Convention. DONE in duplicate at New Delhi, this twentieth day of April, 1999 in Arabic, Hindi and English languages, all three texts being equally authentic. In case of divergence between the texts the English text shall be the operative one. For the Government of the For the Government of the Republic of India Hashemite Kingdom of Jordan Sd/- Sd/ (RAVI KANT) (HISHAM MUHAISEN) PROTOCOL At the signing of the Convention concluded today between the Government of the Republic of India and the Government of the Hashemite Kingdom of Jordan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed that the following provisions shall form an integral part of the said Convention. Article 9---Associated Enterprises 1. With reference to paragraph 2 of Article 9, it is understood that the provisions shall not apply in the case of fraud or wilful default. Article 17---Artis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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