TMI BlogAgreement between the Government of the Republic of India and the Government of the Syrian Arab Republic for the avoidance of double taxation and the 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 ..... ), the Central Government hereby directs that all the provisions of the said agreement shall be given effect to in the Union of India. AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE SYRIAN ARAB REPUBLIC 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 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. 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 the Syrian Arab Republic, the income-tax impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their authorised representative; and in the case of Syria, the Ministry of Finance or their authorised representative; (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. 2. In the application of the provisions of this Agreement by a Contracting State, 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 purposes of this Agreement, the term " resident of a Contracting State " means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. 2. Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his residential status for the purposes of this Agreement shall be determined in accordance with the following rules:- (a) he shall be deemed to be a resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage, display or delivery; (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 of 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. Notwithstanding the provisions of paragraphs 1 and 2, where a person-other than an agent of independent status to whom paragraph 5 applies-is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State, an authority to conclude contracts for or on behalf of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise unless the activities of such person are limited to the purchase of goods or merchandise for the enterprise. 5. An enterprise of a Contractin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. However, if the enterprise carries on business in the other Contracting State through a permanent establishment situated therein, the profits of the enterprise may be taxed in the other Contracting States but only so much of them as is attributable to that permanent establishment. This is without prejudice to the right of taxation of such profits by the first-mentioned Contracting State according to its tax laws. 2. 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 cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tickets for such transportation on behalf of other enterprises, the incidental lease of aircraft and any other activity directly connected with such transportation. Article 9 SHIPPING 1. Profits derived by an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise (that is, the head office) is situated. 2. The provisions of paragraph 1 shall also apply to a share of profits from the operation of ships in international traffic derived by an enterprise of a Contracting State through participation in a pool, a joint business or an international operating agency. 3. Paragraph 1 shall not apply to profits arising as a result of coastal traffic. Article 10 ASSOCIATED ENTERPRISES 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 Contracti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the laws of that State, but the tax so charged shall not exceed 7.5 per cent. of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State and paid to the Government of the other Contracting State or a local authority thereof, the Central Bank of that other Contracting State or any agency wholly owned by that Government or local authority shall be exempt from tax in the first-mentioned Contracting State. The competent authorities of the Contracting State may determine by mutual agreement any other Government institution to which this paragraph shall apply. 4. The term " interest " as used in this Article means income from Government securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits, and other debt-claims of every kind as well as other income assimilated to income from money lent by the taxation laws of the Contracting State in which the income arises. 5. The provisions of paragraph 1 and 2 shall not apply if the recipient of the interest, being a resident of a Contracting State, carries on business in the other Contracting State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y patent, trade mark, design or model, plan, secret formula, or process, or for the use of, or the right to use industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. 4. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the royalties, being a resident of a Contracting State carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 15, as the case may be, shall apply. 5. Royalties shall be deemed to arise in a Contracting State when the payer is the Government of that Contracting State or a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NAL SERVICES 1. Income derived by a resident of a Contracting State in respect of prefessional services or other independent activities of a similar character shall be taxable only in that State unless: (a) he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities; in that case, only so much of the income may be taxed in that other State as is attributable to that fixed base; or (b) he is present in the other Contracting State for the purpose of performing his activities for a period or periods exceeding in the aggregate 183 days in the relevant " previous year " or " year of income ", as the case may be; in that case, only so much of the income may be taxed in that other State as is attributable to the activities performed in that other State. 2. The term " professional services " includes independent scientific, literary, artistic, educational or teaching activities, as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. Article 16 DEPENDENT PERSONAL SERVICES 1. Subject to the provisions of Articles 17, 18, 19, 20, 21 and 22, salari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticle 19 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. 2. Any pension paid by the Government of one of the Contracting States to any individual who is a citizen of either of the two Contracting States shall be taxable only in the Contracting State which is paying the pension. 3. The provisions of paragraphs 1 and 2 shall not apply to remuneration and pensions in respect of services rendered in connection with any business carried on by the Government or either of the Contracting States for the purposes of profit. 4. For the purposes of this Article, the term " Government " shall include any local or statutory authority of either Contracting State and in particular the Reserve Bank of India and the Central Bank of Syria. In the case of India, it shall also include any State Government. Article 20 NON-GOVERNMENT PENSIONS AND ANNUITIES 1. Any pension (other than a pension referred to in ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Contracting State. 2. This Article shall not apply to income from research if such research is undertaken primarily for the private benefits of a specific person or persons. 3. For the purposes of this Article and Article 21, an individual shall be deemed to be a resident of Contracting State if he is resident in that Contracting State in the " previous year " or the " year of income ", as the case may be, in which he visits the other Contracting State or in the immediately preceding " previous year " or the " year of income ". 4. For the purpose of paragraph 1, " approved institution " means an institution which has been approved in this regard by the competent authority of the concerned Contracting State. Article 23 INCOME NOT EXPRESSLY MENTIONED Items of income of a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Agreement, shall be taxable only in that State. CHAPTER IV METHODS FOR ELIMINATION OF DOUBLE TAXATION Article 24 ELIMINATION OF DOUBLE TAXATION 1. The laws in force in either of the Contracting State shall continue to govern the taxation of income in the respective Contracting State e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the income which may be taxed in India. 5. For the purposes of the deduction referred to in paragraph 4, " income-tax paid in India " shall be deemed to include any amount which would have been payable as Indian tax but for a deduction allowed in computing the taxable income or an exemption or reduction from tax granted for that year under:- (i) Sections 10(4), 10(4A), 10(6)(viia), 10(15)(iv), 10(28), 10A, 32A, 33A, 35P (sic), 54E, 80HH, 80HHA, 80-I, 80L of the Income-tax Act, 1961 (43 1961), so far as they were in force on, and have not been modified since, the date of the signature of this Agreement, or have been modified only in minor respects so as not to affect their general character, or (ii) any other provision which may be enacted after the fifth day of March, 1982, granting a deduction in computing the taxable income or an exemption or reduction from tax which the competent authorities of the Contracting States agree to be for the purposes of economic development, if it has not been modified thereafter or has been modified only in minor respects so as not to affect its general character. 6. Where under this Agreement a resident of a Contracting State is exempt f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of notice of the action which gives rise to taxation not in accordance with the Agreement. 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 an appropriate solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with this Agreement. Any agreement reached shall be implemented notwithstanding any time-limits in the national laws of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. 4. The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a commission consisting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such profits as are derived after the first day of April, 1975; (ii) in the case of any other income, as respects income assessable for any assessment year commencing on or after the first day of April, 1983. (b) In Syria: (i) in the case of profits derived from operation of aircraft (referred to in Article 8) as respects such profits as are derived after the first day of April, 1975; (ii) in the case of any other income, as respects income assessable for any assessment year commencing on or after the first day of January, 1983. Article 30 TERMINATION This Agreement shall continue in effect indefinitely but either of the Contracting States may, on or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State through diplomatic channels, written notice of termination and, in such event, this Agreement shall cease to be effective: (a) in India, in respect of income assessable for the assessment year commencing on the 1st day of April in the second calendar year next following the calendar year in which the notice is given, and subsequent yea ..... 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