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TMI BlogAgreement between the Government of the Republic of India and the Sultanate of Oman for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxesX X X X Extracts X X X X X X X X Extracts X X X X ..... A AND THE SULTANATE OF OMAN 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 Sultanate of Oman. Desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income; 1[Have agreed as follows : Article 1 Personal scope This Agreement shall apply to persons who are residents of one or both of the Contracting States. Article 2 Taxes covered 1. The taxes to which this Agreement shall apply are : (a) in India, the income-tax including any surcharge thereon; (hereinafter referred to as Indian tax) (b) in the Sultanate of Oman : (i) the Company Income-tax ; (ii) the Profit Tax on Commercial and Industrial Establishments; (hereinafter referred to as Omani tax) 2. This Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Agreement in addition to, or in place of, taxes referred to in paragraph 1. The competent authorities of the Contracting States shall notify each othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual possessing the nationality of a Contracting State, and any legal person, partnership or association deriving its status from the laws in force in the Contracting State; (j) the term person includes an individual, a company, a body of persons and any other entity which is treated as a taxable unit under the taxation laws in force in the respective Contracting States; (k) the term tax means Indian tax or Omani 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 imposed relating to those taxes. 2. As regards the application of this Agreement 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 Contracting State concerning the taxes to which this Agreement applies. Article 4 Resident 1. For the purposes of this Agreement, the term resident of a Contracting State means any person who, under the laws of that Contracting State, is liable to tax therein by reason of his domicile, residence, place of management or any other cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds 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 activity of a preparatory or auxiliary character. 4. Notwithstanding the provisions of paragraphs 1 and 2, where a person (other than an agent of independent status to whom paragraph 5 applies) is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 3 of this Article 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. 5. An enterprise of a Contracting State s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly or indirectly mean, for the purposes of this Article, that where a permanent establishment takes an active part in negotiating, concluding or fulfilling contracts entered into by the enterprise, then notwithstanding that other parts of the enterprise have also participated in those transactions, there shall be attributed to the permanent establishment that proportion of profits of the enterprise arising out of those contracts as the contribution of the permanent establishment to those transactions bears to that of the enterprise as a whole. 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 determining the profits of a permanent establishment, there shall be allowed as deductions expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther activity directly connected with such transportation. 5. For the purposes of this Article and notwithstanding the provisions of paragraph 1(f) of Article 3, the term enterprise of a Contracting State means: (i) in case of the Sultanate of Oman, Gulf Air, Oman Aviation Services Company (SAOG) and any other enterprise carried on by a resident of the Sultanate of Oman ; (ii) in case of India, Air India, Indian Airlines and any other enterprise carried on by a resident of India. Article 9 Shipping 1. Profits derived by an enterprise of a Contracting State from the operation of ships in international traffic shall be taxable only in that Contracting State. 2. The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency. 3. For the purposes of this Article, interest on funds directly connected with the operation of ships in international traffic shall be regarded as income or profits from the operation of such ships and the provisions of Article 12 shall not apply in relation to such interest. 4. The term operation of ships means business of transportation by sea of passengers, mail, live ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Contracting 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 case, the provisions of Article 7 or Article 16, 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 Contracting State may not impose any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other Contracting 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 that other Contracting State, nor subject the companies undistributed profits to a tax on the companies undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Contracting State when the payer is that Contracting State itself, a political sub-division, a local authority or a resident of that ContractingState. However, where the person paying the interest, whether he is a resident of a Contracting State or not, has in that 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. 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd some other person, the amount of royalties, 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 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 Agreement. Article 14 Technical fees 1. Technical fees arising in a Contracting State which are derived by a resident of the other Contracting State may be taxed in that other Contracting State. 2. However, such technical fees may also be taxed in the Contracting State in which they arise, and according to the laws of that Contracting State; but if the recipient is the beneficial owner of the technical fees, the tax so charged shall not exceed 15 per cent of the gross amount of the technical fees. 3. The term technical fees as used in this Article means payments of any kind to any person, other than to an employee of the person making the payments, in consideration for any services of a techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racting State in the other Contracting State for the purpose of performing independent personal services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such fixed base, may be taxed in that other Contracting 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 or both 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 Contracting 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 that Contracting State. 6. Gains from the alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in the Contracting State of which the alienator is a resident. Article 16 Independent personal services 1. Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffic by an enterprise of a Contracting State shall be taxable only in that Contracting State. In case of aircraft, the term enterprise of a Contracting State shall have the same meaning as defined in paragraph 5 of Article 8 of this Agreement. Article 17 Dependent personal services 1. Subject to the provisions of Articles 18, 19, 20, 21, 22 and 23, 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 Contracting 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 Contracting 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 Contracting State if: (a) the recipient is present in the other Contracting State for a period or periods not exceeding in the aggregate 183 days in the relevant fiscal year, and (b) the remuneration is paid by, or on behalf of an employer who is not a resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot to the entertainer or sportsperson himself but to another person, that income shall be taxable only in the other Contracting State, if that other person is supported wholly or substantially from the public funds of that other Contracting State, including any of its political sub-divisions or local authorities. Article 20 Remuneration and pensions in respect of Government service 1. (a) Remuneration other than a pension, paid by a Contracting State or a political sub-division or a local authority thereof to an individual in respect of services rendered to that Contracting State or sub-division or authority shall be taxable only in that Contracting State. (b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that other Contracting State and the individual is a resident of that Contracting State who : (i) is a national of that other Contracting State; or (ii) did not become a resident of that other Contracting State solely for the purpose of rendering the services. 2. (a) Any pension paid by, or out of funds created by a Contracting State or a political sub-division or a local authority thereof to an individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 Payments received by professors, teachers and research scholars 1. A professor or teacher who is or was resident of a Contracting State immediately before visiting the other Contracting State for the purpose of teaching or engaging in research, or both, at a university, college, school or other approved institution in that other Contracting State shall be exempt from tax in that other Contracting State on any remuneration for such teaching or research for a period not exceeding two years from the date of his arrival that other Contracting State. 2. This Article shall not apply to income from research if such research is undertaken primarily for the private benefit of a specific person or persons. 3. For the purposes of this Article and Article 22, an individual shall be deemed to be a resident of a Contracting State if he is a resident in that ContractingState in the fiscal year in which he visits the other Contracting State or in the immediately preceding fiscal year. 4. For the purposes 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 24 Other income 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the income which may be taxed in India. 4. The tax payable in a Contracting State mentioned in paragraph 2 and paragraph 3 of this Article shall be deemed to include the tax which would have been payable but for the tax incentives granted under the laws of the Contracting State and which are designed to promote economic development. 5. Income which, in accordance with the provisions of this Agreement, is not to be subjected to tax in a Contracting State, may be taken into account for calculating the rate of tax to be imposed in that Contracting State. Article 26 Mutual agreement procedure 1. Where a person 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 Agreement, 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 Agreement. 2. The competent authority shall endeavour, if the objection app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the matters in respect of which such exchange of information shall be made, including, where appropriate, exchange of information regarding tax avoidance. 2. The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both. The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis. 3. 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 or administrative practice of that or of the other Contracting State ; (b) to supply information or documents which are 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 or documents 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 28 Diplomatic and consular activities Nothing in this Agreement shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OF INDIA FOR THE GOVERNMENT OF THE SULTANATE OF OMAN PROTOCOL At the signing the Agreement between the Republic of India and the Sultanate of Oman for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, both sides have agreed upon the following provision which shall be an integral part of the Agreement : If an air transport enterprise of India with respect to profits referred to in Article 8 is charged to any tax of the kind referred to in Article 2 in one of the shareholding States of Gulf Air, the Contracting States shall reopen negotiations without delay with a view to arriving at an appropriate solution in respect of the application of Article 8 of the Agreement. IN WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed this Protocol. DONE in duplicate at New Delhi, this 2nd day of April, one thousand nine hundred and ninety-seven in the Arabic, Hindi and English languages, all the texts being equally authentic. In case of divergent interpretation of the texts, the English text shall prevail. FOR THE GOVERNMENT OF THE REPUBLIC OF INDIA FOR THE GOVERNMENT OF THE SULTANATE OF OMAN [F. No. 501/6/91 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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