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TMI BlogSection 90 of Income-tax Act, 1961 - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries with the Government of the Syrian Arab RepublicX X X X Extracts X X X X X X X X Extracts X X X X ..... he Union of India with effect from the 1st day of April, 2009. [Notification No. 33/2009-FTD-II/F. No.503/7/2005-FTD-II] K. RAMALINGAM, Jt. Secy. ANNEXURE AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE SYRIAN ARAB REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME PREAMBLE The Government of the Republic of India and the Government of the Syrian Arab Republic, 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 1 PERSONAL SCCOPE 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce in the respective Contracting States; e) 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; f) The term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes; g) The term "enterprise" applies to the carrying on of any business; h) The terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; i) 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; j) The term "competent authority" means: a). in the case of Syria, the Minister of Finance or his authorized representative; b). in the case of India: the Finance Minister, Government of India, or his authorized repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her of them, the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement. 3. 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 State in which its place of effective management is situated. 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; d) a factory; e) a workshop; f) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; g) a sales outlet; and h) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on; i) a warehouse in relation to a person providing storage facilities for others on payment of charges. 3. (a) A building site or construction, assembly or installation project or supervisory activities in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder 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; or c) habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise itself. 6. Notwithstanding the preceding provisions of this Article, an insurance enterprise of a Contracting State shall, except in regard to re-insurance, be deemed to have a permanent establishment in the other Contracting State if it collects premiums in the territory of that other State or insures risks situated therein through a person other than an agent of an independent status to whom paragraph 7 applies. 7. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, he will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibuted 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 determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere, in accordance with the provisions of and subject to the limitations of the tax laws of that State. 4. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary. The method of apportionment adopted shall, however, be such that the result shall be in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. 2. Where a Contracting State includes in the profits of an enterprise of that State-and taxes accordingly-profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions 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 if that other State consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company's undistributed profits to a tax on the company's undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. ARTICLE 11 INTEREST 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the beneficial owner of the interest, is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest. 3. Notwithstanding the provisions of paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State, provided that it is derived and beneficially owned by: a) the Government, a political sub-division or a local authority of the other Contracting State; or b) (i) in the case of India, the Reserve Bank of India; and (ii) in the case of Syria, the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther State. 2. However, such royalties may also be taxed in the Contracting State in which they arise, and according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State the tax so charged shall not exceed 10 per cent of the gross amount of the royalties. 3. 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. 4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , including such gains from the alienation of such a permanent establishment (alone or 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 in a company which is a resident of a Contracting State may be taxed in that State. 5. Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4 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 from the performance of professional services or other activities of an independent character shall be taxable only in that State. However, such income may be taxed in the other Contracting State in the following circumstances: a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate. ARTICLE 17 ARTISTES AND SPORTSPERSONS 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 sportsperson, from 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 sportsperson in his capacity as such accrues not to the entertainer or sportsperson himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or sportspersons are exercised. 3. The provisions of paragraphs 1 and 2, shall not apply to income from activities performed in a Contracting State by entertainers or sportspersons if the activities are substantially supported by public funds of one or both of the Contracting States or of political sub-divisions or local authorities thereof. In such a case, the income shall be taxable only in the Contracting State of which the entertainer or sportsperson is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such teaching, lectures or research shall not be taxed in the first mentioned State, for a period of one year from the date of his first arrival in the first-mentioned State. 2. The provisions of paragraph 1 shall not apply to income from research carried out primarily for the benefit of a private person or persons and not for public interest. 3. For the purposes of this Article, an individual shall be deemed to be a resident of a Contracting State if he is resident in that State in the fiscal year in which he visits the other Contracting State or in the immediately preceding fiscal year. ARTICLE 21 STUDENTS 1. A student who is or was a resident of one of the Contracting States 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 besides grants, loans and scholarships be exempt from tax in that other State on: a) payments made to him by persons residing outside that other State for the purposes of his maintenance, education or training; and b) remuneration which he derives from an employment which he exercises in the other Contracting State if the employment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction is given, which is attributable, as the case may be, to the income which may be taxed in Syria. b) Where in accordance with any provision of the Agreement income derived by a resident of India is exempt from tax in India, India may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. 3. In Syria: a) Where a resident of Syria derives income which, in accordance with the provisions of this Agreement, may be taxed in India, Syria shall allow as a deduction from the tax on the income of that resident, an amount equal to the tax paid in India, such deduction shall not, however, exceed that portion of the tax as computed before the deduction is given, which is attributable, as the case may be, to the income which may be taxed in India. b) Where in accordance with any provision of the Agreement, income derived by a resident of Syria is exempt from tax in Syria, Syria may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income. ARTICLE 24 NON-DISCRIMINATION 1. Nationals of a Contracting State shall not be subjected in the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g State of which he is a resident or, if his case comes 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 action resulting in taxation not in accordance with the provisions of the Agreement. 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Agreement. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in the Agreement. 4. The competent authorities of the Contracting States may communicate with each other directly for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a manner that the primary purpose was to obtain the benefits under this Agreement. The cases of legal entities not having bona fide business activities shall be covered by the provisions of this Article. ARTICLE 28 MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements. ARTICLE 29 ENTRY INTO FORCE 1. The Contracting States shall notify each other in writing, through diplomatic channels that the procedures required by the respective laws for the entry into force of this Agreement have been completed. 2. This Agreement shall enter into force on the date of receipt of later of the notifications referred to in paragraph 1 of this Article. 3. The provisions of this Agreement shall have effect: (a) In India, in respect of income derived in any fiscal year beginning on or after the first day of April next following the calendar year in which the Agreement enters into force; and (b) In Syria: (i) in respect of taxes withheld at source, on the amounts paid or credited to the accoun ..... X 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 Syrian Arab Republic, on signing at New Delhi on the 18 day of June, 2008, the Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes or income have agreed upon the following provisions which shall form an integral part of the said Agreement: 1. For the purposes of paragraph 3 of Article 4, it is clarified that in cases where the State in which the place of effective management of a person (other than an individual) is situated cannot be determined, then the competent authorities of the Contracting States shall endeavour to settle the question by mutual agreement. 2. With reference to paragraph 2 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, within the framework of provisions of domestic law of the first mentioned Contracting State, nor as being in conflict with the provisions of paragraph 3 of article 7. 3. With reference to Article 26 on "Exchange of information ..... X X X X Extracts X X X X X X X X Extracts X X X X
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