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TMI BlogConvention between the India & Uganda for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income notifiedX X X X Extracts X X X X X X X X Extracts X X X X ..... section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India. ANNEXURE CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE REPUBLIC OF UGANDA 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 Republic of Uganda, desiring to conlude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and with a view to promoting economic cooperation between the two countries, have agreed as follows: Article 1 PERSONAL SCOPE This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1. This Convention shall apply to taxes on income imposed by a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied. 2. There shall be regarded as taxes on income all taxes imposed on total income, or on element ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm "national" means: (i) any individual possessing the nationality of a Contracting State; (ii) any legal person, partnership, association deriving its status as such from the taws in force in a Contracting State; (i) the term "fiscal year" means: (i) in the case of Uganda, the "year of income" as defined under Section 3 of the Income Tax Act, 1997; (ii) in the case of India, "previous year" as defined under section 3 of the Income-tax Act, 1961; (j) the term "tax" means Indian tax or Ugandan tax, as the context requires, but shall not include any amount which is payable in respect of any default or omission in relation to the taxes to which this Convention applies or which represents a penalty imposed relating to those taxes. (k) the terms "a Contracting State" and "the other Contracting State" mean Republic of Uganda or the Republic of India as the context requires. 2. As regards the application of this Convention by a Contracting State any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the law of that State concerning the taxes to which the Convention applies. Article 4 RESIDENT 1. For the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or others; (i) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on; (j) a building site or construction or assembly project or supervisory activities in connection therewith constitute a permanent establishment only if such site, project or activity lasts more than six months. 3. Notwithstanding the preceding provisions of this Article, the term "permanent establishment" shall be deemed not to include: (a) the use of facilities solely for the purpose of storage or display or delivery of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; (e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt status within the meaning of this paragraph. 7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 6 INCOME FROM IMMOVABLE PROPERTY 1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State. 2. The term "immovable property" shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of those Articles shall not be affected by the provisions of this Article. Article 8 SHIPPING AND AIR TRANSPORT 1. Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State. 2. Profits derived by a transportation enterprise referred to in paragraph 1 which is a resident of a Contracting State from the use, maintenance, or rental of containers (including trailers and other equipment for the transport of containers) used for the transport of or merchandise in international traffic shall be taxable only in that Contracting State unless the containers are used solely within the other Contracting State. 3. For the purposes of this Article, interest on funds connected with the operation of ships or aircraft in international traffic shall be regarded as profits derived from the operation of ships or aircraft, and the provisions of Article 11 shall not apply in relation to such interest. 4. The provisions of paragraphs 1 shall also apply to profits from participation in a pool, a joint business, or an international operating agency. Article 9 ASSOCIATED EN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected to the same taxation treatment as income from shares by the laws of the State of which the company making the distribution is a resident. 4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such a case the provisions of Article 7 or Article 14, as the case may be, shall apply. 5. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company except in so far as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 7. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties or fees for technical services was incurred, and such royalties or fees for technical services are borne by such permanent establishment or fixed base, then such royalties or fees for technical services shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. 6. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties or fees for technical services, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention. Article 13 CAPITAL GAINS 1. Gains derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med in that other State may be taxed in that other State. 2. The term "professional services" includes especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, surgeons, dentists and accountants. Article 15 DEPENDENT PERSONAL SERVICES 1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. 2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any 12-month period commencing or ending in the fiscal year concerned; and (b) the remunerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. (b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State. 3. The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof. Article 20 STUDENTS AND APPRENTICES 1. A student or business apprentice who is or was a resident of a Contracting State immediately before visiting the other Contracting State and who is present in that other Contracting State solely for the purpose of his education or training shall be exempt from tax in that other State on payments made to him by persons residing outside that other State for the purpose of his maintenance, education or training. 2. The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny sort or gambling or betting of any form or nature whatsoever, such income may be taxed in the other Contracting State. Article 23 ELIMINATION OF DOUBLE TAXATION 1. The laws in force in either of the Contracting States will continue to govern the taxation of income in the respective Contracting States except where provisions to the contrary are made in this Convention. 2. In the case of Uganda double taxation shall be eliminated as follows: Where a resident of Uganda derives income which, in accordance with the provisions of this Convention, may be taxed in India, Uganda shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in India, Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed in India. 3. In the case of India double taxation shall be eliminated as follows: Where a resident of India derives income which, in accordance with the provisions of this Convention, may be taxed in Uganda, India shall allow as a deduction from the tax on the income of that resident an amount equal to the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsome than the taxation and connected requirements to which other similar enterprises of the first- mentioned State are or may be subjected 4. Except where the provisions of paragraph 1 of Article 9 or paragraph 7 of Article 11 or paragraph 6 of Article 12 apply, interest, royalties and other disbursement paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, far the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first- mentioned State. Article 25 MUTUAL CONVENTION PROCEDURE 1. Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case conies under paragraph 1 of Article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (b) to supply information or documents which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy. Article 27 COLLECTION ASSISTANCE 1. The Contracting States undertake to lend assistance to each other in the collection of taxes to which this Convention relates, together with interest, costs, and civil penalties relating to such taxes, referred to in this Article as a "revenue claim". 2. Request for assistance by the competent authority of a Contracting State in the collection of a revenue claim shall include a certification by such authority that, under the laws of that State, the revenue claim has been finally determined. For the purposes of this Article, a revenue claim is finally determined when a Contracting State has the right under its internal law t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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