Article 9 - Shipping - Bulgaria

ARTICLE 9 SHIPPING 1. Income derived by an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that State. 2. Notwithstanding anything contained in paragraph 1 of this Article and paragraph 2 of Article 10 of the Agreement on merchant shipping dated 18-11-1976, between the Government of the Republic of India and the Government of the People's Republic of Bulgaria, income derived by an enterprise of a Contracting State from the operation of ships in international traffic from the ports of the other Contracting State to the ports of third countries and from the ports of third countries to the ports of the other Contracting State may be taxed in the other Contracting State, but the tax imposed in that other Contracting State shall not exceed : (a) 50 per cent of the tax otherwise imposed by the taxation law of that other Contracting State, or (b) 2.50 per cent of the gross amount payable in respect of such operation of ships, whichever is lower. 3. For the purposes of clause (b) of paragraph 2 of this Article, the gross amount payable in respect of the operation of ships shall mean the aggregate of the following amounts, namely : (a) the gross amount paid or payable on account of the carriage of passengers, livestock, mail or goods shipped at a port or ports in the other Contracting State; (b) the gross amount received in the other Contracting State on account of carriage of passengers, livestock, mail or goods shipped at a port of the third country; (c) interest arising in the other Contracting State on funds connected with the operation of ships in international traffic; (d) the gross amount payable on account of the use, maintenance or rent of containers (including trailers and related equipment for the transport of containers) in connection with the transport of goods or merchandise in international traffic. 4. The provisions of paragraphs 1 and 2 shall also apply to profits from the participation in a pool, a joint business or an international operating agency engaged in the operation of ships. 5. For the purposes of this Article, (a) interest on funds connected with the operation of ships in international traffic shall be regarded as income from the operation of such ships and the provisions of Article 12 shall not apply in relation to such interest; and (b) income from the operation of ships includes income derived from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) in connection with the transport of goods or merchandise in international traffic.