Article 1 - Personal Scope - Portuguese Republic

SYNTHESISED TEXT OF THE MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY RELATED MEASURES TO PREVENT BASE EROSION AND PROFIT SHIFTING (MLI) AND THE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE PORTUGUESE REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME This document was prepared jointly by the Competent Authorities of India and Portugal and represents their shared understanding of the modifications made to the Convention by the MLI. This document presents the synthesised text for the application of the Convention between the Government of the Republic of India and the Government of the Portuguese Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income signed on 11th September, 1998 and the Amending Protocol signed on 24th June, 2017 (together hereinafter referred to as the Convention ), as modified by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting signed by India and Portugal on 7th June, 2017 (hereinafter referred to as the MLI ). This document was prepared on the basis of the reservations and notifications submitted to the Depositary (the Secretary-General of the Organisation for Economic Co-operation and Development), upon ratification, by India on 25th June, 2019 and by Portugal on 28th February, 2020, respectively. These reservations and notifications are subject to modifications as provided in the MLI. Modifications made to reservations and notifications could modify the effects of the MLI on the Convention. The sole purpose of this document is to facilitate the understanding of the application of the MLI to the Convention and the document does not constitute a source of law. The authentic legal texts of the Convention and the MLI take precedence and remain the legal texts applicable. The provisions of the MLI that are applicable with respect to the provisions of the Convention are included in boxes throughout this document in the context of the relevant provisions of the Convention. The boxes containing the provisions of the MLI have generally been inserted in accordance with the ordering of the provisions of the Convention. In this document, changes to the text of the provisions of the MLI have been made to conform the terminology used in the MLI to the terminology used in the Convention (such as changes from Covered Tax Agreement to Convention , and changes from Contracting Jurisdiction to Contracting State ). Similarly, changes have been made to parts of provisions of the MLI that describe existing provisions of the Convention by replacing such descriptive language with the article and paragraph numbers of the existing provisions. These changes are intended to increase the readability of the document and are not intended to change the substance of the provisions of the MLI. Unless the context otherwise requires, references made to the provisions of the Convention will be understood as referring to the provisions of the Convention as modified by the provisions of the MLI. References: In India: The authentic legal text of the MLI (in English) can be found on the MLI Depositary (OECD) webpage at the following link: http://www.oecd.org/tax/treaties/multilateral-convention-to-implement-tax-treaty-related-easures-to-prevent-BEPS.pdf The authentic legal texts of the Convention (in English) can be found at the following link: https://www.incometaxindia.gov.in/Pages/international-taxation/dtaa.aspx In Portugal: The authentic legal text of the MLI can be found at the following link: https://data.dre.pt/eli/resolassrep/225/2019/11/14/p/dre The authentic legal text of the Convention can be found at the following links: https://data.dre.pt/eli/resolassrep/20/2000/03/06/p/dre/pt/htm https://data.dre.pt/eli/resolassrep/133/2018/05/25/p/dre/pt/html (Amending Protocol signed on 24 th June, 2017) The reservations and notifications (in English) submitted to the Depositary upon ratification, by India on 25th June, 2019, and by Portugal on 28th February, 2020, respectively, can be found on the MLI Depositary (OECD) webpage. Entry into force and entry into effect of the MLI : The MLI enters into force for India on 1st October, 2019 and for Portugal on 1st June, 2020. The provisions of the MLI applicable to the Convention do not take effect on the same dates as the original provisions of the Convention. Each of provisions of the MLI could take effect on different dates, depending on the types of taxes involved (taxes withheld at source or other taxes levied) and on the choices made by India and Portugal in their reservations and notifications. Unless it is stated otherwise elsewhere in this document, the provisions of the MLI have effect with respect to the Convention: In India: With respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after 1st April, 2021; and with respect to all other taxes levied by India, for taxes levied with respect to taxable periods beginning on or after 1st April, 2021. In Portugal: With respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after 1st January, 2021; and with respect to all other taxes levied by Portugal, for taxes levied with respect to taxable periods beginning on or after 1st December, 2020. CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OFTHE PORTUGUESE REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME The Government of the Republic of India and the Government of the Portuguese Republic, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, The following preamble text described in paragraph 1 of Article 6 of the MLI is included in the preamble of the Convention: ARTICLE 6 OF THE MLI - PURPOSE OF A COVERED TAX AGREEMENT Intending to eliminate double taxation with respect to the taxes covered by this [1] Convention without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this [Convention] for the indirect benefit of residents of third jurisdictions), have agreed as follows: CHAPTER I SCOPE OF THE CONVENTION ARTICLE 1 PERSONAL SCOPE This Convention shall apply to persons who are residents of one or both of the Contracting States. The following paragraph 1 of Article 11 of the MLI applies, and supersedes the provisions of the Convention only to the extent that those provisions are incompatible with said paragraph 1: ARTICLE 11 OF THE MLI - APPLICATION OF TAX AGREEMENTS TO RESTRICT A PARTY S RIGHT TO TAX ITS OWN RESIDENTS [The Convention] shall not affect the taxation by a [Contracting State] of its residents, except with respect to the benefits granted under [paragraph 2 of Article 9 and Articles 19, 20, 21, 23, 24, 25 and 28 of the Convention]. FOOTNOTES: - 1 . The text between [square brackets] and in italics indicate minor terminology changes made to the text of the MLI to be consistent with the terminology used in the Convention.