Clause 258 - Agreement with foreign countries - Direct Taxes Code Bill, 2009

PART - G GENERAL CHAPTER - XV Agreement with foreign countries 258. (1) The Central Government may enter into an agreement with the Government of any other country— (a) for the granting of relief in respect of - (i) income on which income-tax has been paid both under this Code and under the corresponding law in force in that country; or (ii) income-tax chargeable under this Code and under the corresponding law in force in that country to promote mutual economic relations, trade and investment; (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country; (c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country, or investi-gation of cases of such evasion or avoidance; (d) for recovery of income-tax under this Act and under the corresponding law in force in that country; or (e) for carrying out any other purpose of this Act or the corresponding law in force in that country. (2) The Central Government may enter into an agreement with the Government of any specified territory outside India for the purposes specified in sub-section (1). (3) Any specified association in India may enter into an agreement with any specified association in the specified territory outside India for the purposes specified in sub-section (1). (4) The Central Government may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreements. (5) A person shall not be entitled to claim relief under the provisions of the agreement unless a certificate of his being a resident in the other country or specified territory is obtained by him from the tax authority of that country or specified territory, in the prescribed form. (6) The provisions of this Code shall not be regarded as discriminatory against the foreign company merely on the consideration that the liability of the foreign company to pay tax is calculated at a rate higher than the rate at which the liability of a domestic company is calculated. (7) Any term used in the agreement, but not defined in this Code or in the agreement referred to in sub-section (1), shall have the meaning assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf, having regard to the fact that the meaning is not inconsistent with the provisions of this Code or the Agreement. (8) For the purposes of determining the relationship between a provision of a treaty and this Code,- (a) neither the treaty nor the Code shall have a preferential status by reason of its being a treaty or law; and (b) the provision which is later in time shall prevail.