TMI BlogConvention between the Government of the Republic of India and the Government of the Kingdom of Morocco for the avoidance of double taxation u/s 90X X X X Extracts X X X X X X X X Extracts X X X X ..... XURE CONVENTION BETWEEN THE REPUBLIC OF INDIA AND THE KINGDOM OF MOROCCO 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 Kingdom of Morocco desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income have agreed as follows : ARTICLE 1 Scope of the Convention 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. 3. The existing taxes to which this Convention shall apply are in particular : ( a ) In the Republic of India: the income-tax, including any surcharge thereon; (hereinafter referred to as Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( f ) the terms enterprise of a Contracting State and enterprise of 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 ; ( g ) the term fiscal year means : ( i ) in the case of India, previous year as defined in section 3 of the Income-tax Act, 1961 ; ( ii ) in the case of Morocco, a fiscal exercise as defined under the laws relating to the General Income-tax and the Corporation Tax. ( h ) 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; ( i ) the term national means any individual, possessing the nationality of a Contracting State and any legal person, partnership or association deriving its status from the laws in force in the Contracting State; ( j ) the term person includes an individual, a company, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lishment 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 of natural resources ( g ) a sales outlet ; ( h ) a warehouse in relation to a person providing storage facilities for others; ( i ) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on; and ( j ) a building site or construction or assembly project or supervisory activities in connection therewith, but only where such site, project or activity continues for a period of more than eight months. 3. An enterprise shall be deemed to have a permanent establishment in a Contracting State and to carry on business through that permanent establishment if it provides services or facilities in connection with, or supplies plant and machinery on hire used for or to be used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other 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. 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 Contracting 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 also be taxed in that other State. 2. The t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and dealing wholly independently with the enterprise of which it is a permanent establishment. 3. In determining the profits of a permanent establishment, there shall be allowed as deductions, expenses which are incurred for the purposes of business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of the tax laws, and subject to the limitations laid down therein. 4. In so far as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary. The method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. 5. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate 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 Contracting 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 the beneficial owner of the dividends, the tax so charged shall not exceed 10 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng State shall be exempt from tax in that State provided it is derived and beneficially owned by : ( i ) the Government, a political sub-division, or a local authority of the other Contracting State; or ( ii ) 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 ( iii ) in the case of Morocco, the Bank A/-Maghrib (the Central Bank of Morocco), the Northern Provinces Development Agency, the Central Popular Bank and its regional agencies, the National Bank of Economic Development, the Moroccan Bank of Foreign Trade, the Communal Equipment Fund, the Immovable and Hotel Credit and the Industrial Development Office. ( iv ) any other institution as may be agreed from time to time between the competent authorities of the Contracting State. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracting State. 2. However, 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 the 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. The term royalties as used in this Article means : ( a ) payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic or scientific work including cinematograph films or recordings on any means of reproduction for use for radio or television broadcasting, any patent, trade mark, design or model, plan, computer software programme, secret formula or process, or for information concerning industrial, commercial or scientific experience, and ( b ) payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial or scientific equipment. 4. The term fees for technical services means payments of any kind in consideration for the rendering of managerial, technical or consul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Gains 1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may also be taxed in that other contracting State. 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 together with the whole enterprise) or of such a fixed base, may be taxed in that other Contracting State. 3. Gains 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 the Contracting State in which the place of effective management of the enterprise is situated. 4. Gains from the alienation of shares of the capital stock of a company the property of which consists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period or periods not exceeding in the aggregate 183 days in the relevant fiscal year; and ( b ) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and ( c ) 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 in international traffic, by an enterprise of a Contracting State shall be taxable only in that 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 be taxed in that other Contracting State. ARTICLE 17 Income earned by Artistes and Sportspersons 1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an artiste, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from his personal activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esident of a Contracting State from sources within the other Contracting State may be taxed only in the first-mentioned Contracting State. 2. The term pension means a periodic payment made in consideration of past services. 3. The term annuity means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money's worth. ARTICLE 20 Payments received by Students and Apprentices 1. A student or business apprentice who is or was a resident of one of the Contracting State immediately before visiting the other Contracting State and who is present in the other 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 for an amount not exceeding the equivalent of US dollars 2000, during any fiscal year ; provided that such employment is directly related to his studies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 paragraphs 1 2 if a resident of a Contracting State derives income from sources within the other Contracting State in the form of lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting of any form or nature whatsoever, such income may be taxed in the other Contracting State. ARTICLE 23 Avoidance of Double Taxation 1. The 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 Morocco, India shall allow as a deduction from the tax on the income of that resident an amount equal to the income-tax paid in Morocco, whether directly or by deduction at source. Such am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting State to grant to persons not residents in that State any personal allowances, reliefs, reductions or deductions for taxation purposes which are by law available only to persons who are so resident. 4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected in the same circumstances. 5. In this Article, the term taxation means taxes which are the subject of this Convention. ARTICLE 25 Mutual Agreement Procedure 1. Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he information in public Court proceedings or in judicial decisions. The competent authorities shall, through consultation, develop appropriate conditions, methods and techniques concerning the matters in respect of which such exchange of information shall be made, including, where appropriate, exchange of information regarding tax avoidance. 2. The exchange of information or documents shall be either on routine basis or on request with reference to particular cases or both. The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis. 3. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation : ( a ) to carry out administrative measures at variance with the laws or administrative practice of that or of the other Contracting State; ( b ) to supply information or documents which are 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 or documents which would disclose any trade, business, industrial, commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the Convention enters into force; and ( b ) in Morocco, in respect of income arising on or after the first day of January of the calendar year next following the year in which this Convention enters into force. ARTICLE 30 Termination This Convention shall remain in force indefinitely, until terminated by a Contracting State. Either Contracting State may terminate the Convention through diplomatic channels by giving notice of termination at least six months before the end of any calendar year beginning after the expiration of five years from the date of entry into force of the Convention. In such event, the Convention shall cease to have effect : ( a ) In India, in respect of income arising in any fiscal year on or after the first day of April next following the calendar year in which the notice of termination is given ; ( b ) in Morocco, in respect of income arising on or after the first day of January of the calendar year next following the year in which the notice of termination is given. In witness whereof the undersigned, being duly authorized thereto, have signed this Convention. Done in duplicate at Rabat, this 30th day of October, 1998, in Hin ..... 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