Protocol - Protocol - Italy

PROTOCOL To the Convention between the Government of the Republic of India and the Government of the Republic of Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. At the signing of the Convention concluded today between the Government of the Republic of Italy 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 undersigned have agreed upon the following additional provisions which shall form an integral part of the said Convention. It is understood :- (a) that, with reference to Article 7, paragraph 3, the expression expenses which are incurred for the purposes of the business of the permanent establishment means the expenses directly connected with the activity of the permanent establishment, and royalties, commission and interest to the extent of the actual amount of expenses reimbursed, and in both cases as admissible in accordance with the provisions of the taxation laws of the Contracting State in which the permanent establishment is situated; (b) that, with reference to Article 12, paragraph 2, the expression loans or debts means, in the case of India, loans or debts approved in this behalf by the Government of India; (c) that, with reference to Article 20, the remuneration paid to an individual in respect of services rendered to the Bank of Italy, to the Italian State Railways (FF.SS.), to the Italian State Post undertaking (PP.TT.), to the Italian Foreign Trade Institution (I.C.E.), to the Italian Tourism body (E.N.I.T.), and to any corresponding Indian body or institution, are covered by the provisions concerning Government service and, consequently, by paragraphs 1 and 2 of the aforesaid Article. Other public bodies or institutions may also be included in the preceding list by mutual agreement between the competent authorities of the Contracting States; (d) that, with reference to Article 24, paragraph 4(b), tax exempted or reduced means, in the case of India, any amount which would have been payable, in respect of a taxable year as Indian tax but for a deduction allowed in computing the taxable income or an exemption or reduction of tax granted for that year under : (i) Sections 10(4), 10(4A), 10(4B), 10(15)(iv), 10A, 32AB, 80HH, 80HHC, 80-I and 80U of the Income-Tax Act, 1961 (43 of 1961), so far as they were in force on and have not been modified since the date of signature of this Convention or have been modified only in minor respects so as not to affect their general character; (ii) any other provision which may subsequently be made granting an exemption or reduction from tax which is agreed by the competent authorities of the Contracting States to be of a substantially similar character, if it has been modified only in minor respects so as not to affect its general character; (e) that, with reference to Article 26, paragraph 1, the expression notwithstanding the remedies provided by the national laws means that the mutual agreement procedure is not alternative to the national ordinary proceedings which shall be, in any case, preventively initiated, when the claim is related with an assessment of taxes not in accordance with this Convention. (f) that, with reference to paragraph 3 of Article 29, the provisions herein contained shall not be construed as preventing the competent authorities of the Contracting States from mutually agreeing upon a different procedure for the granting of tax benefits provided by this Convention. In witness thereof the undersigned, duly authorised thereto by their respective Governments, have signed the present Protocol. Done in duplicate at New Delhi, the 19th day of February, 1993, in the Hindi, Italian and English languages, all texts being equally authoritative except in the case of doubt when the English text shall prevail.