Protocol - Protocol - Sri Lanka

PROTOCOL The Government of the Republic of India and the Government of the Democratic Socialist Republic of Sri Lanka on signing at New Delhi on 22nd January, 2013, the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on income have agreed upon the following provisions which shall form an integral part of the said Agreement. (i) In respect of paragraphs 1 and 2 of Article 7, it is understood that where an enterprise of a Contracting State sells goods or merchandise or carries on business in the other Contracting State through a permanent establishment situated therein, the profits of that permanent establishment shall not be determined on the total amount received by the enterprise, but shall be determined only on the basis of that part of the receipts which is attributable to the actual activity of the permanent establishment for such sales or business. Likewise in the case of contracts for survey, supply, services, constructions or installations, when the enterprise has a permanent establishment, the profits of such permanent establishment shall not be determined on the total amount of the contract, but shall be determined only on the basis of that part of the contract which is effectively carried out by the permanent establishment in the Stat, where the permanent establishment is situated. (ii) It is understood that in relation to this Agreement if at any time the provisions of the domestic law of a Contracting State are more beneficial to a resident of the other Contracting State, then such more beneficial provisions of the domestic law shall prevail over the provisions of this Agreement. (iii) It is understood that, in respect of Article 10 on 'Dividends' the rate of withholding agreed to at 7.5% will be subject to review after three years from the date the Agreement enters into force. In case this rate is not reviewed after 3 years, the agreed rate of 7.5 % will continue. IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Protocol. DONE in duplicate at New Delhi, this 22 d day of January, 2013, each in the Hindi Sinhala and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail.