9911796707
TMI BlogConvention between the Government of the Republic of India and the Government of Mauritius for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gainsX X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961 (43 of 1961), and section 24A of the Companies (Profits) Surtax Act, 1964 (7 of 1964), the Central Government hereby directs that all the provisions of the said Convention, shall be given effect to in the Union of India. CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF MAURITIUS FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS The Government of the Republic of India and the Government of Mauritius. DESIRING to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains and for the encouragement of mutual trade and investment. 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. Article II TAXES COVERED 1. The existing taxes to which this Convention shall apply are: (a) in the case of India: (i) the income-tax including any surcharge thereon imposed under the Income-tax Act, 1961 (43 of 1961); (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate, which is treated as a taxable unit under the taxation laws, in force in the respective Contracting States; (f) the term ' company ' means any body corporate or any entity which is treated as a company or a body corporate under the taxation laws in force in the respective Contracting State; (g) The terms ' enterprise of a Contracting State ' and ' enterprise of the other Contracting State, mean respectively an industrial, mining, commercial, plantation or agricultural enterprise or similar undertaking carried on by a resident of a Contracting State and an industrial, mining, commercial, plantation or agricultural enterprise or similar undertaking carried on by a resident of the other Contracting State; (h) the term ' competent authority ' means, in the case of India, the Central Government in the Ministry of Finance (Department of Revenue) or their authorised representative, and in the case of Mauritius, the Commissioner of Income Tax or his authorised representative; (i) the term ' national ' means any individual possessing the nationality of a Contracting State and any local person, partnership or association deriving its s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of both the Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated. Article 5 Permanent Establishment 1. For the purposes of this Convention, the term ' permanent establishment ' means a fixed place of business through which the business of the enterprise is wholly or partly carried on. 2. The term ' permanent establishment ' shall include: (a) a place of management; (b) a branch; (c) an office; (d) a factory; (e) a workshop; (f) a warehouse in relation to a person providing storage facilities for others; (g) a mine, an oil or gas well, a quarry or any other place of extraction of natural resources; (h) a farm, plantation or other place where agricultural, forestry, plantation or related activities are carried on; (i) a building site or construction or assembly project or supervisory activities in connection therewith, where such site, project or supervisory activity continues for a period of more than nine months. 3. Notwithstanding the preceding provisions of this article, the term ' permanent establishment ' shall be deemed n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on business in that other Contracting State (whether through a permanent establishment or otherwise) shall not, of itself, constitute either company a permanent establishment of the other. CHAPTER III TAXATION OF INCOME Article 6 INCOME FROM IMMOVABLE PROPERTY 1. Income from immovable property may be taxed in the Contracting State in which such property is situated. 2. The term immovable property shall be defined in accordance with the law and usage of the Contracting State in which the property is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agricultural 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, oilwells, quarries and other places of extraction of natural resources, ships, boats and aircraft shall not be regarded as immovable property. 3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the provisions of this Article. Article 8 SHIPPING AND AIR TRANSPORT 1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 2. If the place of effective management of a shipping enterprise is abroad a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship 4 [ is a resident ] . 3. The provisions of paragraph 1 of this Article shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 4. For the purposes of paragraph 1, interest on funds connected with the operation of ships or aircraft in international traffic shall be regarded as profits from the operation of such ships or aircraft, and the provisions of Article 11 shall not apply in relation to such interest. 5. The term operation of ships or aircraft shall mean business of transportation of persons, mail, livestock or goods, carried on by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the dividends. 4. The term ' dividends ' as used in this Article means income from shares or other rights, not being debt-claims, participating in profits, as well as income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the Contracting State of which the company making the distribution is a resident. 5. The provisions of paragraphs 1, 2 and 3 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. 6. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racting State in which the interest arises, through a permanent establishment situated therein, or performs 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 case, the provisions of Article 7 or Article 14, as the case may be, shall apply. 7. Interest shall be deemed to arise in a Contracting State when the payer is that Contracting 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 in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by that permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 8. Where, by reason of a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermanent establishment, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated. 6. Where, by reason of a special relationship between the payer and the recipient or between both of them and some other person, the amount of royalties paid, 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 recipient in the absence of such relationship, the provisions of this article shall apply only to the last mentioned amount. In that 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 from the alienation of immovable property, as defined in paragraph 2 of article 6, may be taxed in the Contracting State in which such property is situated. 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 fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the provisions of paragraph 1 of this Article, 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 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 the relevant previous year or year of income , 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 in respect of an employment exercised aboard a ship or aircraft in international traffic, may be taxed only in the Contracting State in which the place of effective management of the enterprise is situated. 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 of a company which is a resident of the other Contracting State may be taxed in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with any business carried on by the Government of either of the Contracting States for the purpose of profit. 4. The provisions of paragraph 1 of this Article shall likewise apply in respect of remuneration paid under a development assistance programme of a Contracting State, out of funds supplied by that State, to a specialist or volunteer seconded to the other Contracting State with the consent of that other State. 5. For the purposes of this Article, the term Government shall include any State Government or local or statutory authority of either Contracting State and, in particular, the Reserve Bank of India and the Bank of Mauritius. Article 19 Non-Government Pensions and Annuities 1. Any pension, other than a pension referred to in Article 18, or any annuity derived by a resident of a Contracting State from sources within the other Contracting State shall be taxed only in the first mentioned Contracting State. 2. The term pension means a periodic payment made in consideration of past services or by way of compensation for injuries received in the course of performance of services. 3. The term annuity means a stated sum payable periodical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a resident of a Contracting State if he is resident in that Contracting State in the previous year or the year of income , as the case may be, in which he visits other Contracting State or in the immediately preceding previous year or the year of income . 4. For the purpose of paragraph 1, approved institution means an institution which has been approved in this regard by the competent authority of the concerned Contracting State. Article 22 OTHER INCOME 1. Subject to the provisions of paragraph 2 of this Article, items of income of a resident of a Contracting State, wherever arising, which are not expressly dealt with in the foregoing Articles of this Convention, shall be taxable only in that Contracting State. 2. The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the recipient of such income being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purposes of economic development. 4. (a) The amount of Indian tax payable under the laws of India and in accordance with the provisions of this Convention, whether directly or by deduction, by a resident of Mauritius, in respect of profits or income arising in India, which has been subjected to tax both in India and Mauritius shall be allowed as a credit against Mauritius tax payable in respect of such profits or income provided that such credit shall not exceed the Mauritius tax (as computed before allowing any such credit) 6 [ which is appropriate ] to the profits or income arising in India. (b) In the case of a dividend paid by a company which is a resident of India to a company which is a resident of Mauritius and which owns at least 10 per cent. of the shares of the company paying the dividend, the credit shall take into account (in addition to any Indian Tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Indian tax payable by the company in respect of the profits out of which such dividend is paid.) 5. For the purposes of the credit referred to in paragraph 4, the term ' Indian Tax payable ' shall be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the term taxation means taxes which are the subject of this Convention. Article 25 Mutual Agreement Procedure 1. Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, notwithstanding the remedies provided by the national laws of those States, present his case to the competent authority of the Contracting State of which he is a resident. This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the Convention. 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 an appropriate 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 not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the laws of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omatic or consular officials under the general rules of international law or under the provisions of special agreements. CHAPTER VI FINAL PROVISIONS Article 28 Entry into Force Each of the Contracting States shall notify to the 8 [ other, the completion ] of the procedures required by its law for the bringing into force of this Convention. The Convention shall enter into force on the date of the later of these notifications and shall thereupon have effect: (a) in India, in respect of income and capital gains assessable for any assessment year commencing on or after 1st April, 1983; (b) in Mauritius, in respect of income and capital gains assessable for any assessment year commencing on or after 1st July, 1983. Article 29 Termination This Convention shall remain in force indefinitely but either of the Contracting States may, on or before the thirtieth day of June, in any calendar year beginning after the expiration of a period of five years from the date of its entry into force, give the other Contracting State through diplomatic channels; written notice of termination and, in such event, this Convention shall cease to have effect: (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
