TMI BlogAgreement for Avoidance of double taxation and prevention of fiscal evasion with foreign countries - Lithuania.X X X X Extracts X X X X X X X X Extracts X X X X ..... rce; and, in respect of other taxes on income and taxes on capital, for taxes chargeable for any fiscal year beginning on or after the first day of April next following the calendar year in which the Agreement enters into force; 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, as set out in the Annexure hereto, shall be given effect to in the Union of India from 1st day of April, 2013. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL The Government of the Republic of India and the Government of the Republic of Lithuania, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital and with a view to promoting economic cooperation between the two Contracting States, have agreed as follows: Article 1 : PERSONS COVERED - This Agreement shall appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context requires; ( d ) 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 Contracting State; ( e ) the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes; ( 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 "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; ( h ) the term "competent authority" means: ( i ) in India: the Finance Minister, Government of India, or his authorised representative; ( ii ) in Lithuania: the Minister of Finance or his authorised representative; ( i ) the term "national" means: ( i ) any individual possessing the nationality of a Contracting State; ( ii ) any legal perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 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, the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement having regard to the person's place of incorporation, the place of effective management and any other relevant factors. In the absence of such agreement, for the purposes of the Agreement, the person shall not be entitled to claim any benefits provided by this Agreement. 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 ) place of management; ( b ) a branch; ( c ) an office; ( d ) a factory; ( e ) a workshop; ( f ) a store or premises used as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 6 applies - is acting in a Contracting State on behalf of an enterprise of the other Contracting State, that enterprise 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. An enterprise shall not be deemed to have a permanent establishment in a Contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in that 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 State but only so much of them as is attributable to that permanent establishment. 2. Subject to the provisions 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 may 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 Agreement 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 beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch it arises and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, provided that it is derived and beneficially owned by: ( a ) the Government, a political subdivision or a local authority of the other Contracting State; or ( b ) ( i ) in India, the Reserve Rank of India, the Export-Import Bank of India, the National Housing Bank; and ( ii ) in Lithuania, the Bank of Lithuania; or ( c ) any other financial institution wholly owned by the Government of the other Contracting State as may be agreed upon between the competent authorities of the 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 ..... 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 if the beneficial owner of the royalties or fees for technical services is a resident of the other Contracting State, the tax so charged shall not exceed 10 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 or films or tapes and other means of image or sound reproduction used for television or radio broad casting, any 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. ( b ) The term "fees for technical services" as used in this Article means payments of any kind, other than those mentioned in Articles 14 and 15 of this Agreement in consideration for the services of a managerial or technical or consultancy nature, including the provision of services of technical or other personnel. 4. The provisions of para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty 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 derived by an enterprise of a Contracting State operating ships or aircraft in international traffic 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 in a company which is a resident of a Contracting State may be taxed in that State. 5. Gains from the alienation of any property other than that referred to in the preceding paragraphs shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 : INDEPENDENT PERSONAL SERVICES - 1. Income derived by an individual who is a resident of a C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or any other similar organ of 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 not to the entertainer or sportsperson himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportsperson are exercised. 3. The provisions of paragraphs 1 and 2 shall not apply to income derived from activities exercised in a Contracti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of a Contracting State immediately before visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college or other similar approved institution in that other Contracting State shall be exempt from tax in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date of his first arrival in that other State. 2. This Article shall apply to income from research only if such research is undertaken by the individual in the public interest and not primarily for the benefit of some private person or persons. Article 21 : STUDENTS - 1. Payments which a student, an apprentice or a trainee 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 solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State. Article 22 : OTHER INCOME - 1. Items of income of a resident of a Contracting State, wherever arising, not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( ii ) as a deduction from the tax on the capital of that resident, an amount equal to the capital tax paid in Lithuania. Such deduction in either case shall not, however, exceed that portion of the income tax or capital tax as computed before the deduction is given, which is attributable, as the case may be, to the income or the capital which may be taxed in Lithuania. ( b ) Where in accordance with any provision of the Agreement income derived or capital owned by a resident of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the remaining income or capital of such resident, take into account the exempted income or capital. 2. In Lithuania, double taxation shall be eliminated as follows: Where a resident of Lithuania derives income or owns capital which, in accordance with this Agreement, may be taxed in India, unless a more favourable treatment is provided in its domestic law, Lithuania shall allow: ( a ) as a deduction from the tax on the income of that resident, an amount equal to the income tax paid thereon in India; ( b ) as a deduction from the tax on the capital of that resident, an amount equal to the capital t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State. 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 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 of every kind and description. Article 26 : 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorizes such use. 3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting 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 or authenticated 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 discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue claim of a Contracting State is a claim in respect of which that State may, under its law, take measures of conservancy with a view to ensure its collection, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State. That other State shall take measures of conservancy in respect of that revenue claim in accordance with the provisions of its laws as if the revenue claim were a revenue claim of that other State even if, at the time when such measures are applied, the revenue claim is not enforceable in the first-mentioned State or is owed by a person who has a right to prevent its collection. 5. Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim under the laws of that State by reason of its nature as such. In addition, a revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4 shall not, in that State, have any priority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of a Contracting State, or with respect to any transaction undertaken by such a resident, if the main purpose of the creation or existence of such a resident or of the transaction undertaken by him, was to obtain the benefits under this Agreement that would not otherwise be available. 2. Where by reason of the provisions of paragraph 1 a resident of a Contracting State is denied the benefits of this Agreement in the other Contracting State, the competent authority of the other Contracting State shall notify the competent authority of the first-mentioned Contracting State. Article 31 : ENTRY INTO FORCE - 1. The Governments of the Contracting States shall notify each other in writing of the completion of the procedures required by the respective laws for the entry into force of this Agreement. 2. This Agreement shall enter into force on the date of the later of the notifications referred to in paragraph 1 of this Article. The provisions of this Agreement shall have effect: ( a ) in India: ( i ) in respect of taxes withheld at source, on income derived on or after the first day of April next following the calendar year in which the Agreement enters into force; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government of the Republic of Lithuania for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital, the undersigned have agreed that the following provisions shall form an integral part of the Agreement: 1. Ad Article 5 It is understood that on the date of this Agreement none of the agreements for the avoidance of double taxation concluded by Lithuania provide for special provision deeming an insurance enterprise of a Contracting State to have a permanent establishment in the other Contracting State if it collects premiums or insures risks in the territory of that other State through a dependent agent. However, if after that date, such special provision is included in any agreement for the avoidance of double taxation concluded by Lithuania, then, after consultations between the competent authorities of the Contracting States, such provision shall also be considered for this Agreement. 2. Ad Article 6 Where the ownership of shares or other corporate rights in a company entitles the owner of such shares of corporate rights to the enjoyment of immovable property held by the company, the income from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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