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TMI BlogAmending the Agreement between the Government of the Republic of India and the Government of the Swiss Federal Council u/s 90X X X X Extracts X X X X X X X X Extracts X X X X ..... DING THE AGREEMENT BETWEEN THE REPUBLIC OF INDIA AND THE SWISS CONFEDERATION FOR THE AVOIDANCE OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME The Government of the republic of India and the Swiss Federal Council Desiring to amend the Agreement between the Republic of India and the Swiss Confederation for the Avoidance of Double Taxation with respect to taxes on income, signed at New Delhi on 2nd November, 1994 (hereinafter referred to as "the Agreement"), have agreed as follows : ARTICLE 1 Sub-paragraph ( a ) of Paragraph 1 of Article 3 of the Agreement shall be replaced by the following : "( a ) the term "India" means the territory of India and includes the territorial sea and the air space above it, as well as any other maritime zone in which India has sovereign rights, other rights and jurisdictions, according to the Indian law and in accordance with international law, including the UN Convention on the Law of the sea ; " ARTICLE 2 1. The first sentence of sub-paragraph (1) of paragraph 2 of Article 5 of the Agreement shall be replaced by the following : "(1) the furnishing of technical services, other than services as defined in Article 12, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustments, 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 6 1. The first sentence of paragraph 2 of Article 10 of the Agreement shall be replaced by the following : "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 beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the dividends." 2. Paragraph 4 of Article 10 of the Agreement shah be replaced by the following : "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 payi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rforms in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is 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. 6. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political sub-division, 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 Contracting State in which the permanent establishment or fixed base is situated." ARTICLE 8 1. The heading and paragraph 1 to 7 of Article 12 of the Agreement shall be replaced by the following : "ARTICLE 12 Royalties and fees for Technical Services 1. Royalties and fees for technical services arising in a Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racting State when the payer is that State itself, a political sub-division, local authority or a resident of that State. Where, however, the person paying the royalties or fees for technical services, 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 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." 2. In paragraph 8 of Article 12 of the Agreement the term "included services" shall be replaced by the term "technical services". ARTICLE 9 1. Paragraph 2 of the Article 13 of the Agreement shall be replaced by the following : "2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, or of movable property pertaining to a fixed base available to a resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 also 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 remuneration is paid by, or on behalf of, an employer who is not a resident of the other State ; and ( c ) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. 3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross amount of the interest." ARTICLE 13 1. Article 22 of the Agreement shall become Article 24. 2. Paragraph 1 of renumbered Article 24 of the Agreement shall be replaced by the following : "1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States." 3. The following paragraph shall be inserted after paragraph 2 of renumbered Article 24 of the Agreement : "3. Except where the provisions of Article 9, paragraph 7 of Article 11, or paragraph 8 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that State." In this case sub-paragraph ( b ) of paragraph 1 of Article 23 of the Agreement shall be deleted. F. The existing paragraph 4 of the Protocol to the Agreement shall become paragraph 6. G. In the Protocol to the Agreement the following paragraph shall be inserted after paragraph 6 : "7. With reference to paragraph 4 of Article 24 It is understood that this provision shall not be construed as preventing a Contracting State from charging the profits of a permanent establishment which a company of the other Contracting State has in the first-mentioned State at a rate of tax which is higher than that imposed on the profits of a similar company of the first-mentioned Contracting State, nor as being in conflict with the provisions of paragraph 3 of Article 7 of this Agreement." H. The existing paragraph 5 of the Protocol to the Agreement shall become paragraph 8 and its heading shall be replaced by the following : "8. With reference to Article 25" ARTICLE 16 1. The Governments of the Contracting States shall notify each other through diplomatic channels that all legal requirements and procedures for giving effect to this Protocol have been satis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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