TMI BlogAgreement between the Government of the Republic of India and the Republic of the Hong Kong Special Administrative Region of People’s Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxesX X X X Extracts X X X X X X X X Extracts X X X X ..... aph 2 of Article 29 of the said Agreement; And whereas, sub-paragraph (b) of paragraph 3 of Article 29 of the said Agreement provides that the provisions of the Agreement shall have effect in India in respect of income derived in any fiscal year beginning on or after the first day of April following the date on which the Agreement enters into force; Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of said Agreement, as annexed hereto, 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 HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE S REPUBLIC OF CHINA 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 Hong Kong Special Administrative Region of the People s Republic of China, desiring to conclude an Agreement for the avoidance of double taxation and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther maritime zone in which India has sovereign rights, other rights and jurisdiction, according to the Indian law and in accordance with international law, including the United Nations Convention on the Law of the Sea; (b) the term company means any body corporate or any entity that is treated as a body corporate for tax purposes; (c) the term competent authority means: (i) in the case of the Hong Kong Special Administrative Region: the Commissioner of Inland Revenue or his authorized representative; (ii) in the case of India: the Finance Minister, Government of India, or his authorized representative; (d) the term Contracting Party or the other Contracting Party means the Hong Kong Special Administrative Region or India, as the context requires; (e) the term domestic law , in relation to the Hong Kong Special Administrative Region means the internal law of the Hong Kong Special Administrative Region; (f) the terms enterprise of a Contracting Party and enterprise of the other Contracting Party mean respectively an enterprise carried on by a resident of a Contracting Party and an enterprise carried on by a resident of the other Contracting Party; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son constituted under the laws of the Hong Kong Special Administrative Region or, if constituted outside the Hong Kong Special Administrative Region, being normally managed or controlled in the Hong Kong Special Administrative Region; (b) in the case of India, any person who, under the laws of India, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. This term, however, does not include any person who is liable to tax in India in respect only of income from sources in India; (c) in the case of either Contracting Party, the Government of that Party, or any political subdivisions or local authorities thereof. 2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting Parties, then his status shall be determined as follows: (a) he shall be deemed to be a resident only of the Party in which he has a permanent home available to him; if he has a permanent home available to him in both Parties, he shall be deemed to be a resident only of the Party with which his personal and economic relations are closer (centre of vital interests); (b) if the Party in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or related activities are carried on; and (i) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. 3. The term permanent establishment also encompasses: (a) a building site, a construction, assembly or installation project or supervisory activities in connection therewith, but only if such site, project or activities last more than six months; (b) the furnishing of services, including consultancy services, by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if activities of that nature continue (for the same or a connected project) within a Contracting Party for a period or periods aggregating more than 183 days within any twelve-month period. 4. Notwithstanding the preceding provisions of this Article, the term permanent establishment shall be deemed not 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent status within the meaning of this paragraph. 7. The fact that a company which is a resident of a Contracting Party controls or is controlled by a company which is a resident of the other Contracting Party, or which carries on business in that other Party (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 Party from immovable property (including income from agriculture or forestry) situated in the other Contracting Party may be taxed in that other Party. 2. The term immovable property shall have the meaning which it has under the law of the Contracting Party in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting 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, quarries, source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, nothing in paragraph 2 shall preclude that Contracting Party from determining the profits to be taxed by such apportionment or other method; the method 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 or merchandise for the enterprise. 6. 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. 7. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article. Article 8 Shipping and Air Transport 1. Profits of an enterprise of a Contracting Party from the operation of ships or aircraft in international traffic shall be taxable only in that Party. 2. Notwithstanding the provisions of paragraph 1, profits of an enterprise of a Contracting Party derived in the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have accrued to the enterprise of the first-mentioned Party if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other Party 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 Agreement and for this purpose the competent authorities of the Contracting Parties shall if necessary consult each other. Article 10 Dividends 1. Dividends paid by a company which is a resident of a Contracting Party to a resident of the other Contracting Party may be taxed in that other Party. 2. However, such dividends may also be taxed in the Contracting Party of which the company paying the dividends is a resident and according to the laws of that Party, but if the beneficial owner of the dividends is a resident of the other Contracting Party, the tax so charged shall not exceed 5 per cent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3. The term dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting Party shall be exempt from tax in that Party provided that it is derived and beneficially owned by: (a) the Government, a political subdivision or a local authority of the other Contracting Party; or (b) (i) in the case of the Hong Kong Special Administrative Region, the Hong Kong Monetary Authority and the Exchange Fund; (ii) in the case of India, the Reserve Bank of India and the Export-Import Bank of India; or (c) any other institution as may be agreed upon from time to time between the competent authorities of the Contracting Parties. 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 attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. 5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 for television or radio broadcasting, 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. 4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting Party, carries on business in the other Contracting Party in which the royalties arise, through a permanent establishment situated therein , or performs in that other Party 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 case the provisions of Article 7 or Article 15, as the case may be, shall apply. 5. Royalties shall be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of paragraphs 1 and 2 shall not apply if the beneficial owner of the fees for technical services, being a resident of a Contracting Party, carries on business in the other Contracting Party in which the fees for technical services arise, through a permanent establishment situated therein, or performs in that other Party independent personal services from a fixed base situated therein, and the right or property in respect of which the fees for technical services are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply. 5. Fees for technical services shall be deemed to arise in a Contracting Party when the payer is a resident of that Party. Where, however, the person paying the fees for technical services, whether he is a resident of a Contracting Party or not, has in a Contracting Party a permanent establishment or a fixed base in connection with which the liability to pay the fees for technical services was incurred, and such fees for technical services are borne by such permanent establishment or fixed base, then such fees for technical services shall be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in paragraph 4 in a company which is a resident of a Contracting Party may be taxed in that Party. 6. Gains from the alienation of any property, other than that referred to in paragraphs 1, 2, 3, 4 and 5, may be taxed in each Contracting Party in accordance with the provisions of its domestic law. 7. The benefits of this Article shall not be available if the main purpose or one of the main purposes of any person concerned with the alienation of property in respect of which the capital gains are derived is to take advantage of this Article by means of that alienation. Article 15 Independent Personal Services 1. Income derived by an individual who is a resident of a Contracting Party from the performance of professional services or other independent activities of a similar character shall be taxable only in that Party except in the following circumstances when such income may also be taxed in the other Contracting Party: (a) if he has a fixed base regularly available to him in the other Contracting Party for the purpose of performing his activities; in that case, only so much of the income as is attributable to that fixed base may be taxed in that other Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident of the other Contracting Party may be taxed in that other Party. Article 18 Artistes and Sportspersons 1. Notwithstanding the provisions of Articles 15 and 16, income derived by a resident of a Contracting Party 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 Party, may be taxed in that other Party. 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, 15 and 16, be taxed in the Contracting Party in which the activities of the entertainer or sportsperson are exercised. 3. The provisions of paragraphs 1 and 2 shall not apply to income from activities performed in a Contracting Party by entertainers or sportspersons if the activities are substantially supported by public funds of one or both of the Contracting Parties or of political subdivisions or local authorities thereof. In such a case, the income shall be taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iting a Contracting Party a resident of the other Contracting Party and who is present in the first-mentioned Party solely for the purpose of his education receives for the purpose of his maintenance or education shall not be taxed in that Party, provided that such payments arise from sources outside that Party. Article 22 Other Income 1. Items of income of a resident of a Contracting Party, wherever arising, not dealt with in the foregoing Articles of this Agreement shall be taxable only in that Party. 2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income, being a resident of a Contracting Party, carries on business in the other Contracting Party through a permanent establishment situated therein, or performs in that other Party independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 15, as the case may be, shall apply. 3. Notwithstanding the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected in the other Contracting Party to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which persons who have the right of abode or are incorporated or otherwise constituted in that other Party (where that other Party is the Hong Kong Special Administrative Region) or nationals of that other Party (where that other Party is India) in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting Parties. 2. The taxation on a permanent establishment which an enterprise of a Contracting Party has in the other Contracting Party shall not be less favourably levied in that other Party than the taxation levied on enterprises of that other Party carrying on the same activities. This provision shall not be construed as obliging a Contracting Party to grant to residents of the other Contracting Party any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting Party, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting Parties. 3. The competent authorities of the Contracting Parties 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 Parties may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs. Article 26 Exchange of Information 1. The competent authorities of the Contracting Parties shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic law of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest in such information to that Party. 5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting Party to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person. Article 27 Members of Government Missions Nothing in this Agreement shall affect the fiscal privileges of members of government missions, including consular posts, under the general rules of international law or under the provisions of special agreements. Article 28 Miscellaneous Rules 1. The provisions of this Agreement shall in no case prevent a Contracting Party from the application of the provisions of its domestic law and measures concerning tax avoidance or evasion, whether or not described as such. 2. A Contracting Party is not required to grant benefits under the Agreement if the main purpose or one of the main purposes of any persons concerned is for the non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hong Kong Special Administrative Region of the People s Republic of China Sd/- (Paul Chan Mo-Po) Finance Secretary Hong Kong PROTOCOL At the time of signing of the Agreement between the Government of the Hong Kong Special Administrative Region of the People s Republic of China and the Government of the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (the Agreement ), the two Governments have agreed upon the following provisions which shall form an integral part of the Agreement: 1. For the purposes of the Agreement, it is understood that in relation to the Hong Kong Special Administrative Region, the terms ordinarily resides and normally managed or controlled have the meaning they have under the law of the Hong Kong Special Administrative Region as amended from time to time without affecting the general principle thereof. In addition to above, with reference to clause (i) of subparagraph (a) of paragraph 1 of Article 4 (Resident) of the Agreement, it is understood that an individual ordinarily resides in the Hong Kong Special Administrative Region if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to: (i) Parliamentary Committees; (ii) Special Investigation Team (SIT) constituted by Government; and (iii) any other oversight bodies mutually agreed upon in writing. (c) the requested Contracting Party shall disclose any information that precedes the date on which the Agreement has effect for the taxes covered by the Agreement, insofar the information is foreseeably relevant for a fiscal year or taxable event following that date. (d) in addition to the taxes covered by the Agreement, the provisions of this Article also apply to the following taxes that are administrated and enforced in India: (i) the wealth tax; (ii) the excise and customs duties; (iii) the goods and services tax (GST); and (iv) the sales and value added taxes. 6. It is understood that the Contracting Parties may review the provisions of the Agreement at the request of either Contracting Party. IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Protocol. DONE in duplicate at Hong Kong this 19th day of March 2018, in the Chinese, Hindi and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
