TMI BlogAgreement between the Govt. of the Republic of India and the Govt. of the United Republic of Tanzania for the avoidance of Double Taxation and prevention of fiscal evasion with respect to Taxes on incomeX X X X Extracts X X X X X X X X Extracts X X X X ..... greement shall be given effect to in the Union of India. ANNEXURE Agreement between the Government of the republic of India and the Government of the United Republic of Tanzania 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 United Republic of Tanzania. Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Have agreed as follows: CHAPTER I SCOPE OF THE AGREEMENT Article 1 Personal Scope This Agreement shall apply to persons who are residents of one or both the Contracting States. Article 2 Taxes Covered 1. The taxes to which this Agreement shall apply are: (a) In the case of India: (1) the income-tax including any surcharge thereon imposed under the Income-tax Act, 1961 (43 of 1961); (2) the surtax imposed under the Companies (Profits) Surtax Act, 1964 (7 of 1964) (hereinafter referred to as " Indian Tax "). (b) In the case of Tanzania: the income-tax and any other tax deemed to be an income-tax under the Income-tax Act, 1973 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " 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; (h) the term " competent authority " means in the case of India, the Central Government in the Ministry of Finance (Department of Revenue); and in the case of Tanzania, the Minister responsible for Finance or his authorised representative; (i) the term " nationals " means: (1) all individuals possessing the nationality of a Contracting State; (2) all legal persons, partnerships and associations deriving their status as such from the law in force in a Contracting State. 2. In the application of the provisions of this Agreement by one of the Contracting States, any term not defined herein shall, unless the context otherwise requires, have the meaning which it has under the laws in force in that State relating to the taxes which are the subject of this Agreement. Article 4 Fiscal Domicile 1. For the purpose of this Agreement, the term " resident of a Contracting State " means any person who, under the law of that State, is liable to taxation therein by reason of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hment " shall not be deemed to include: (a) the use of facilities solely for the purpose of storage or display of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or for collecting information, for the enterprise; (e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information or for scientific research being activities solely of a preparatory or auxiliary character in the trade or business of the enterprise. 4. A person acting in a Contracting State for or on behalf of an enterprise of the other Contracting State-- other than an agent of an independent status to whom the provisions of paragraph 5 apply-- shall be deemed to be a permanent establishment of that enterprise in the first-mentioned State if:-- (i) he has and habitually exercises i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... especting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of or the right to work, mineral deposits, oil wells, quarries and other places of extraction of natural resources. Ships and aircraft shall not be regarded as immovable property. 3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services. Article 7 Business Profits 1. The profits of an enterprise of a Contracting State shall be taxable only in that Contracting State unless the enterprise 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 is attributable to that permanent establishment. 2. If an enterprise of a Contracting State which has a permanent e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndise for the enterprise. 7. 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. 8. The term ' business profits ' means income derived by an enterprise from the carrying on of business; but does not include income in the form of rents, royalties (including rents or royalties in respect of cinematographic films or video tapes for television), fees for technical services, management charges, or remuneration or fees for providing services of technical or other personnel, interest, dividends, capital gains remuneration for labour or personal, (including professional) services or income from the operation of ships or aircraft. Article 8 Air Transport 1. Profits derived by an enterprise of a Contracting State from the operation of aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 2. The provisions of paragraph 1 of this article shall also apply to a share of profits from the operation of aircraft in intern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dividends if the recipient is a company which owns at least 10 per cent. of the shares of the company paying the dividends during the period of six months immediately preceding the date of payment of the dividends; (b) 15 per cent. of the gross amount of the dividends in all other cases. 3. The term " dividends " as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights assimilated to income from shares or any other item which is deemed to be a dividend or distribution of a company by the taxation law of the Contracting State of which the company making the distribution is a resident. 4. The provisions of paragraphs 1and 2 shall not apply if the recipient of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein or performs in that other State professional services from a fixed base situated therein and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Article 7 or Article 16, as the case may be, shall apply. 6. Interest shall be deemed to arise in a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has, in a Contracting State, a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by that permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 7. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, 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 recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provision of this Agreement. Article 14 Capital Gains 1. Gains from the alienation of immovable property, as defined in paragraph 2 of Article 6, may be taxed in the Contracting State in which such property is situated. 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 professional services, including such gains from the alienation of such permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in that other State. 3. Notwithstanding the provisions of paragraph 2, gains by an enterprise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection with which the liability to pay the management or professional fees was incurred and such management or professional fees are borne by such permanent establishment, then such management or professional fees shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 6. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the management or professional fees paid having regard to the services for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this article shall apply only to the last mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State due regard being had to the other provisions of this Agreement. Article 16 Independent Personal Services 1. Subject to the provisions of article 15, income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate may be taxed in that other Contracting State. Article 19 Artistes and Athletes 1. Notwithstanding the provisions of articles 16 and 17, income derived by public entertainers (such as theatre, motion picture, radio or television artistes and musicians) or athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised: Provided that such income shall not be taxed in the said Contracting State if the visit of the public entertainers or athletes to that State is directly or indirectly supported, wholly or substantially, from the public funds of the Government of the other Contracting State. 2. For the purposes of this article, the term " Government " includes a State Government, a political sub-division, or a local or statutory authority of either Contracting State. Article 20 Government Functions 1. Remuneration (not being a pension) paid by the Government of a Contracting State to any individual who is a citizen of that State in respect of services rendered in the discharge of governmental functions in the other Contracting State shall be taxable only in the first-mentioned Contracting State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but in no event shall any individual have the benefits of this article for more than three consecutive years from the date of his first arrival in the first mentioned Contracting State. Article 23 Professors and Teachers 1. A professor or teacher who visits a Contracting State for the purpose of teaching or engaging in research, or both, at a university, or other approved educational institution in that Contracting State and who is, or was immediately before such visits, a resident of the other Contracting State, shall be exempt from tax in the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding 24 months from the date of his arrival in that Contracting State. 2. This article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. 3. For the purposes of this article and article 22, an individual shall be deemed to be a resident of a Contracting State if he is resident: (i) in the case of India, in the " previous years ", and (ii) in the case of Tanzania, in the " year of income " in which he visits the other Contracting Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or reduction of tax which the competent authorities of the Contracting States agree to be for the purpose of economic development. 3.(a) The amount of Indian tax payable, under the laws of India and in accordance with the provisions of this Agreement, whether directly or by deduction, by a resident of Tanzania in respect of income from sources within India which has been subjected to tax both in India and Tanzania shall be allowed as a credit against Tanzania tax payable in respect of such income provided that such credit shall not exceed the Tanzanian tax (as computed before allowing any such credit), which is appropriate to the income derived from sources within India; (b) For the purposes of the credit referred to in sub-paragraph (a) above, the term " Indian tax payable " shall be deemed to include any amount by which Indian tax has been reduced by the special incentive measures set forth in the following sections of the Income-tax Act, 1961: (i) Section 10(4)-- relating to exemption from tax on interest payable to a non-resident on any security notified by the Government of India; (ii) Section 10(4A)-- relating to exemption from tax on interest payable to non-resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to which nationals of that other State in the same circumstances are or may be subjected. 2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances. 3. Nothing contained in this article shall be construed as obliging a Contracting State to grant to persons not resident in that State any personal allowances, reliefs and reductions for taxation purposes which are by law available only to persons who are 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 resident of the other Contracting State, shall not be subjected in the first-mentioned Contracting 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, or to persons with respect to whom the information or document relates. 2. The exchange of information or documents shall be either on a routine basis or on request with reference to a particular case 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 or professional secret or trade process or information the disclosure of which would be contrary to public policy. Article 29 Diplomatic and Consular Activities Nothing in this agreement shall affect the fiscal privileges of diplomatic or consular officials under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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