9911796707
TMI BlogDTAA agreement between Kuwait and Republic of IndiaX X X X Extracts X X X X X X X X Extracts X X X X ..... GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE STATE OF KUWAIT 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 State of Kuwait, desiring to conclude an Agreement 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 I PERSONS COVERED This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 TAXES COVERED 1. This Agreement shall apply to taxes on income imposed on behalf of 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 elements of income, including taxes on gains from the alienation of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises. 3. The existing taxes to which the Agreement shall apply are in parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; h) the term "international traffic" means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; i) the term "competent authority" means: (i) in India: the Central Government in the Ministry of Finance (Department of Revenue) or its authorized representative; (ii) in Kuwait: the Minister of Finance or an authorized representative of the Minister of Finance; j) the term "national" means: (i) any individual possessing the nationality of a Contracting State; (ii) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State; k) the term "tax" means Indian or Kuwaiti 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 Agreement applies or which represents a penalty or fine imposed relating to those taxes; l) The term &qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate in which he has an habitual abode; c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national; d) if his status cannot be determined under the provisions of sub-paras (a) to (c), the competent authorities of the Contracting States shall settle the question by mutual agreement. 4. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident only of the Contracting State in which its place of effective management is situated. If the State in which its place of effective management is situated cannot be determined, then the competent authorities of the Contracting States shall endeavor to settle the question by mutual agreement. Article 5 PERMANENT ESTABLISHMENT 1. For the purposes of this Agreement, the term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2. The term "permanent establishment" includes especially: a) a place of management; b) a branch; c) an office; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of any activities which that person undertakes for the enterprise, if such a person: a) has and habitually exercises in that State an authority to conclude contracts in the name of the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph, or b) has no such authority, but habitually maintains in the first-mentioned State a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the enterprise; c) habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself or for such enterprise and other enterprises which are controlled by it or have a controlling interest in it; d) in so acting, he manufactures or processes in that Contracting State goods and merchandise belonging to the enterprise. 7. Notwithstanding the preceding provisions of this Article, an insurance enterprise of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services. Article 7 BUSINESS PROFITS 1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated in that other Contracting State. If the enterprise carries on or has carried on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. 2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. 3. In determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the principles of this Article. 7. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. 8. Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the 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. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbor of the ship is situated, or, if there is no such home harbor, in the Contracting State of which the operator of the ship is a resident. 3. For the purpose of this Article, profits from the operation of ships or aircraft in international traffic include all of the following: a) Profits from the rental on a bareboat basis of ships or aircraft; b) Profits from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Agreement and the competent authorities of the Contracting States shall if necessary consult each other. Article 10 DIVIDENDS 1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State who is the beneficial owner of such dividends may be taxed in that other State. 2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 10 per cent of the gross amount of the dividends. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3. Notwithstanding the provisions of paragraphs 1 and 2, dividends paid by a company which is a resident of a Contracting State shall not be taxable in that Contracting State if the beneficial owner of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which it arises, and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. 3. Notwithstanding the provisions of paragraphs 1 and 2, interest paid by a company which is a resident of a Contracting State shall not be taxable in that Contracting State if the beneficial owner of the interest is: a) the Government, a political subdivision or a local authority of the other Contracting State; or b) the Central Bank of the other Contracting State; or c) other governmental agencies or financial institutions as may be specified and agreed to in an exchange of notes between the competent authorities of the Contracting States. 4. The term "interest" as used in this Article means income from debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor's profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films or films or tapes used for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. (b) The term "fees for technical services" as used in this Article means payments of any kind, other than those mentioned in Articles 14 and 15 of this Agreement as consideration for managerial or technical or consultancy services, including the provision of services of technical or other personnel. 4. The provisions of paragraph 1 and 2 shall not apply if the beneficial owner of the royalties or fees for technical services being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise, through a permanent establishment situated therein, or performs in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r with the whole enterprise) or of such fixed base, may be taxed in that other State. 3. Gains from the alienation of ships or aircraft operated in international traffic, or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State of which the alienator is a resident. 4. Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that State. 5. Gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in the State in which the company issuing the shares is resident. 6. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3, 4 and 5, shall be taxable only in the Contracting State of which the alienator is a resident. Article 14 INDEPENDENT PERSONAL SERVICES 1. Income derived by an individual who is a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that Contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derives remuneration in respect of duties performed in the other Contracting State shall be taxable only in the first mentioned Contracting State in respect of the remuneration derived from his employment with the enterprise. Article 16 DIRECTORS' FEES Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or other similar organ of a company which is a resident of the other Contracting State shall be taxable only in that other state. Article 17 ARTISTES AND SPORTSMEN 1. Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State. 2. Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsmen himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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, 17 and 18 shall apply to salaries, wages and other similar remuneration and to 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 PROFESSORS, TEACHERS AND RESEARCH SCHOLARS 1. A professor, teacher or research scholar who is or was a resident of the Contracting State immediately before visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college or other similar institution in that other Contracting State shall be exempt from tax in that other State on any remuneration for such teaching or research for a period not exceeding two years from the date of his arrival in that other State. 2. This Article shall apply to income from research only if such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 7 or Article 14, as the case may be, shall apply. Article 23 ELIMINATION OF DOUBLE TAXATION 1. The laws in force in either of the Contracting States shall continue to govern the taxation in the respective Contracting State except where provisions to the contrary are made in this Agreement. 2. It is agreed that double taxation shall be avoided in accordance with the following paragraphs of this Article: a) in the case of India : Where a resident of India derives income which, in accordance with the provisions of this Agreement, may be taxed in both - Kuwait and India, India shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in Kuwait. Such deduction in either case shall not, however, exceed that part of the tax on income as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in Kuwait. b) in the case of Kuwait: Where a resident of Kuwait derives income which, in accordance with the provisions of this Agreement, may be taxed in both - India and Kuwait, Kuwait shall allow as a deduction from the tax on the income of that resident, an amount equal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate shall, for 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. 4. Nothing in this Article shall be interpreted as imposing a legal obligation on a Contracting State to extend to the residents of the other Contracting State, the benefit of any treatment, preference or privilege which may be accorded to any third state or its residents by virtue of the formation of a customs union, economic union, a free trade area or any regional or sub-regional arrangement relating wholly or mainly to taxation or movement of capital to which such the first-mentioned Contracting State may be a party. 5. Enterprises of a Contracting State, the capital of which is wholly or partly owned of controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first- mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises the capital of which is wholly or partly owned or controlled directly or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. 2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: 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 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, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar period or periods unless either Contracting State notifies the other in writing, six months before the expiry of the initial or any subsequent period, of its intention to terminate this Agreement. In such event, this Agreement shall cease to have effect in both Contracting States in respect of income derived in any fiscal year on or after the first day of April next following the calendar year in which the notice is given. IN WITNESS WHEREOF the respective, plenipotentiaries of both Contracting States have signed this Agreement. DONE at New Delhi on 15th day of June, 2006, corresponding to 19th Jamad al awal, 1427 H, two originals, each in the Hindi, Arabic and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail. For the Government of the Republic of India For the Government of the State of Kuwait SHIVRAJ PATIL Minister of Home Affairs BADER MISHARI AL-HUMAIDHI Minister of Finance PROTOCOL The Republic of India and the State of Kuwait on signing at New Delhi on 15th day of June, 2006, corresponding to 19th Jamad al awal, 1427 H, the Agreement for the Avoidance of Double Taxation with respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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