TMI BlogAgreement between the Government of the Republic of India and the Government of the 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 ..... for the entry into force of the said amending Protocol in accordance with paragraph 2 of Article 13 of the said amending Protocol; And whereas, sub-paragraph (b) of paragraph 3 of Article 13 of the said amending Protocol provides that the provisions of the said amending Protocol 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 calendar year in which this Protocol 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 the said amending Protocol, as annexed hereto, shall have effect in the Union of India. ANNEXURE PROTOCOL AMENDING THE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT 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 AND THE PROTOCOL THERETO SIGNED AT NEW DELHI ON 18TH JULY, 1994 The Government of the Republic of India and the Government of the People s Republic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-paragraph (a) of paragraph 3 of Article 2 (Taxes Covered) of the Agreement shall be replaced by the following: (a) In China: (i) the individual income tax; (ii) the enterprise income tax; (hereinafter referred to as Chinese tax ). Article 5 Paragraph 3 of Article 4 (Resident) of the Agreement shall be replaced by the following: 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 determine by mutual agreement the Contracting State of which such person shall be deemed to be a resident for the purposes of the Agreement, having regard to its place of effective management, the place where it is incorporated or otherwise constituted and any other relevant factors. In the absence of such agreement, such person shall not be entitled to any relief or exemption from tax provided by this Agreement except to the extent and in such manner as may be agreed upon by the competent authorities of the Contracting States. Article 6 Article 5 (Permanent Esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other Contracting state, but only if activities of that nature continue for the same or connected project within that Contracting State for a period or periods aggregating more than 183 days within any twelve-month period commencing or ending in the fiscal year concerned. 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 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 carrying on, for the enterprise, any other activity of a preparatory or auxiliary character. 5. Notwiths ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regate vote and value of the company s shares or of the beneficial equity interest in the company) or if another person or enterprise possesses directly or indirectly more than 50 per cent of the beneficial interest (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company s shares or of the beneficial equity interest in the company) in the person and the enterprise or in the two enterprises. 7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 7 Paragraph 1 of Article 7 (Business Profits) of the Agreement shall be replaced by the following: 1. The profits of an enterprise of a Contracting State shall be taxable 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 afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation) of the Agreement shall be replaced by the following: ARTICLE 26 EXCHANGE OF INFORMATION 1. The competent authorities of the Contracting States shall exchange such information (including documents) as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2. 2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, 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 informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Agreement. Article 12 1. Paragraph 3 of the Protocol to the Agreement shall be deleted. 2. A new paragraph 3 of the Protocol to the Agreement shall be inserted as follows: 3. For the purpose of paragraph 3 of Article 11(Interest): (a) the term Central Bank means, in the case of China, the People s Bank of China, and in the case of India, the Reserve Bank of India; (b) the term any financial institution wholly owned by the Government of the other Contracting State means: (i) in the case of China: (A) the China Development Bank; (B) the Agricultural Development Bank of China; (C) the Export-Import Bank of China; (D) the National Council for Social Security Fund; (E) the China Export Credit Insurance Corporation; (F) the China Investment Corporation; (G) any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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