TMI BlogSection 90 of Income-tax Act, 1961 - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries with the Government of the Syrian Arab RepublicX X X X Extracts X X X X X X X X Extracts X X X X ..... or the entry into force of this Agreement, in accordance with Article 29 of the said Agreement. Now, therefore, in exercise 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 Agreement and Protocol annexed hereto shall be given effect to in the Union of India with effect from the 1st day of April, 2009. [F. No.503/7/2005-FTD-II] Notification No. 33/2009-FTD-II K. Ramalingam Joint Secretary to the Government of India ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE SYRIAN ARAB REPUBLIC for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income PREAMBLE The Government of the Republic of India and the Government of the Syrian Arab Republic, desiring to conclude an Agreement 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 PERS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction, according to the Indian law and in accordance with international law, including the United Nations Convention on the Law of the Sea, 1982; c) The terms Contracting State and other Contracting State mean the Syrian Arab Republic or the Republic of India, as the context requires; The term person includes an individual, a company a body of persons and any other entity which is treted as a taxable unitunder the taxation laws in force in the respective Contracting States; e) 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 Jaws in force in a Contracting State; f) The term 'company' means any body corporate or any entity which is treated as body corporate for tax purposes; g) The term enterprise applies to the carrying on of any business; h) 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; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are closer (center of vital interests); b) if the State in which he has his center of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode; c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national; d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall endeaour to settle the question by mutual agreement. 3. Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the State in which its place of effective management is situated. Article 5 PERMANENT ESTABLISHMENT 1. For the purposes of this Agreement, 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 br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person; a) has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph, or b) has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods 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. 6. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other Contracting State but only so much of them as are attributable to that permanent establishment. . 2. Subject to the provision of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting 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 determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes 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 accordan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as profits derived from the operation of such ships or aircraft if they are integral to the carrying on of such business, and the provisions of Article 11 shall not apply in relation to such interest, 5. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or operating agency. Article 9 ASSOCIATED ENTERPRISES 1. Where: a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises 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 Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices from a fixed base situated therein, and the holding in respect of which the dividends 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. 5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Article 11 INTEREST 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of the interest, having regard to the debt-claim for which it is 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 payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 12 ROYALTIES 1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State the tax so charged shall not exceed 10 percent of the gross amount of the royalties. 3. 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 used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of this Agreement. Article 13 CAPITAL 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 be taxed in that other 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 with the whole enterprise) or of such fixed base, may be taxed in that other 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 of which the alienator is a resident. 4. Gains from the alienation of shares in a company which is a resident of a Contracting State may be taxed in that State. 5. Gains fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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 may be taxed 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 in a company which is a resident of the other Contracting State may be taxed in that other State, Article 17 ARTISTES AND SPORTSPERSONS 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 sportsperson, from 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 sportsperson 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 business carried on by a Contracting State or a political subdivision or a local authority thereof. 4. Nothing contained in paragraph 2 shall affect the provisions of the law of a Contracting State concerning the exemption of pensions from tax. Article 20 PROFESSORS, TEACHERS AND RESEARCH SCHOLARS 1. Remuneration which an individual, who is or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is present in the first mentioned State for the purpose of teaching giving lectures, or engaging in research at a University, college, school, scientific research institution or any other similar institution recognized by the Government of the first-mentioned State, for such teaching, lectures or research shall not be taxed in the first mentioned State, for a period of one year from the date of his first arrival in the first-mentioned State. 2. The provisions of paragraph 1 shall not apply to income from research carried out primarily for the benefit of a private person or persons and not for public interest. 3. For the purposes of this Article, an individual shall be deemed to be a resident of a Contracting State if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The laws in force in either of the Contracting States shall continue to govern the taxation of income in the respective Contracting States. However, the provisions of this Agreement shall apply where express provisions have been made in this Agreement. When income is subject to tax in both Contracting States, relief from double taxation shall be given in accordance with the following paragraphs of this Article. 2. In India: a) Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in Syria, India shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in Syria, such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Syria. b) Where in accordance with any provision of the Agreement income derived by a resident of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. 3. In Syria: a) Where a resident of Syria de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntracting 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 the first-mentioned State are or may be subjected. 5. The, provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes covered by this Agreement. 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 Agreement, 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 the provisions of the Agreement. 2. The competent authority shall endeavour, if the objection appears to it to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State the obligation: a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; b) to supply information (including documents and certified copies of the 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 (ordre public). Article 27 LIMITATION OF BENEFITS A resident of a Contracting State shall not be entitled to the benefit of any reduction in or exemption from tax provided for in this Agreement if its affairs were arranged in such a manner that the primary purpose was to obtain the benefits under this Agreement. The cases of legal entities not having bona fide business activities shall be covered by the provisions of this Article. Article 28 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r after the 1st day of January of the calendar year following the year in which the notice of termination is given; (ii) In respect of other taxes on income in respect of the income derived during the fiscal year beginning on or after the 1st day of January of the calendar year following the year in which the notice of termination has been given. IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Agreement. DONE in duplicate at New Delhi this 18 day of June 2008, each in the Hindi, Arabic and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail. For the Government of the Republic of India : (PRANAB MUKHERJEE) EXTERNAL AFFAIRS MINISTER For the Government of the Syrian Arab Republic : DR. AMER HUSNI LUTFI MINISTER OF ECONOMY AND TRADE Notification No.33/2009-FTD [F.No.503/7/2005-FTD] (K. Ramalingam) Joint Secretary to the Government of India PROTOCOL The Government of the Republic of India and the Government of the Syrian Arab Republi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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