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TMI BlogAgreement between the Government of the Republic of India and the Government of the Russian Federation 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 ..... o in the Union of India. Notification : No. 10677 [F. No. 501/6/92-FTD], dated 21-8-1998. A. N. PRASAD, Jt. Secy. Annexure Agreement between the Government of the Republic of India and the Government of the Russian Federation for the avoidance of double taxation with respect to taxes on income The Government of the Republic of India and the Government of the Russian Federation, desiring to conclude an Agreement for the avoidance of double taxation 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 scope 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 in each Contracting State. 2. The taxes to which this Agreement shall apply are in particular : (a) in the case of the Russian Federation : (i) taxes on profits (income) of enterprises and organisations; and (ii) the income-tax on individuals (hereinafter referred to as Russian Tax); (b) in the case of India: income-tax, including any surcharge thereon (hereinafter referred to as Indian tax). 3. This Agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion deriving its status as such from the laws in force in a Contracting State; (h) the term international traffic means any transportation 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 tax means Russian tax or Indian tax, as the context requires, but shall not include any penalty or interest imposed under the laws of either Contracting State in relation to the taxes which are the subject of this Agreement; (j) the term fiscal year means : (i) in the case of the Russian Federation, the financial year beginning on the 1st of January; (ii) in the case of India, the financial year beginning on the 1st of April; (k) the term competent authority means : (i) in the case of the Russian Federation--the Ministry of Finance or its authorised representative; (ii) in the case of India - the Central Government in the Ministry of Finance (Department of Revenue) or their authorized representative. 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (j) a building site or construction, installation or assembly project or supervisory activities in connection therewith, but only if such site, project or activities continue for a period of more than 12 months. However, the competent authorities of the Contracting States may, in particular cases, agree by mutual agreement to consider the supervisory activities in connection with a building site or construction, installation or assembly project as not constituting a permanent establishment also in the cases in which the duration of works on a building site or construction, installation or assembly project exceeds 12 months. 3. Notwithstanding the preceding provisions of this Article, the term permanent establishment shall be deemed not to include : (a) the use of facilities solely for the purpose of storage are display of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage or display; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of this paragraph. 6. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other. Article 6 Income from Immovable Property 1. Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may also be taxed in that other State. 2. The term immovable property shall have the meaning which it has under the laws of the Contracting State in which the property in question is situated. Ships, boats, aircraft and road vehicles shall not be regarded as immovable property. The term immovable property shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the workin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come derived by an enterprise of a Contracting State from the operation or rental of ships or aircraft in international traffic and the rental of containers and related equipment which is incidental to the operation of ships or aircraft in international traffic shall be taxable only in that Contracting State. 2. The provisions of paragraph 1 shall also apply to income from the participation in a pool, a joint business or an international operating agency. 3. For the purposes of this Article, interest on funds connected directly with the operation of ships or aircraft in international traffic shall be regarded as income derived from the operation of such ships or aircraft; and the provisions of Article 11 shall not apply in relation to such interest, provided that such funds are incidental to that operation. 4. Notwithstanding the preceding provisions of this Article, income derived by an enterprise of a Contracting State from the operation of ships between the ports of the other Contracting State and the ports of third countries may be taxed in that other Contracting State, but the tax imposed in that other State shall be reduced by an amount equal to two-third thereof. Article 9 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofits or income from the other Contracting State, that other 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 State or so far 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 State, nor subject the companies undistributed profits to a tax on the companies undistributed profits, even if the dividends paid or the un-distributed 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 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 paragraph 2, interest arising in a Contracting State shall be exempt from tax in that State provided it is derived and beneficially own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement. Article 12 Royalties and Fees for Technical Services 1. Royalties and fees for technical services 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 royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed 10 per cent of the gross amount of the royalties or fees for technical services. 3. The term royalties as used in this Article means : (a) payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic, or scientific work, including cinematography films or recordings on any means of reproduction for use in connection with radio or television broadcasting, any patent, trade mark, design or model, plan, know-how, computer software programme, secret formula or process, or for informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 13 Capital Gains 1. Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may also be taxed in that other State. 2. Gains derived 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 resident of a 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 such fixed base, may be taxed in that other State. 3. Gains derived from the alienation of ships or aircraft operated in international traffic or movable property pertaining to such operation shall be taxable only in the Contracting State of which the alienator is a resident. 4. Gains from the alienati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erated in international traffic by an enterprise of a Contracting State shall be taxed in that State. 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 other State. Article 17 Income of Entertainers and Sportsmen 1. Notwithstanding the provisions of Articles 7, 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 a sportsman 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 sportsman are exercised. 3. Notwithstanding the provisions of paragraphs 1 and 2, income derive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training shall be exempted from tax in that first-mentioned State, provided that such payments are received from outside that State. 2. An individual who immediately before visiting a Contracting State, is or was a resident of the other Contracting State and who is present in the first-mentioned State for a period not exceeding two years solely for the purpose of study, research or training as a recipient of a grant, allowance or award from a scientific, educational, religious or charitable organisation or under a technical assistance programme entered into by the Government of that other Contracting State shall, from the date of his arrival in the first-mentioned State in connection with that visit, be exempt from tax in the first-mentioned State. Article 21 Professors, Teachers and Researchers 1. A professor, teacher or researcher who visits one of the Contracting States for the purpose of teaching or engaging in research at a university or any other educational institution approved by the Government in that State and who, immediately before that vis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt an amount equal to the income-tax paid in Russia whether directly or by deduction at source. Such deduction in either case shall not, however, exceed that part of the income-tax (as computed before the deduction is given) which is attributable to the income which may be taxed in Russia. 3. For the purposes of this Article the term tax paid or payable as mentioned in paragraphs 1 and 2 of this Article shall be deemed to include the tax which would have been paid but for any exemption or reduction of tax granted under incentive provisions contained in the law of a Contracting State designed to promote economic development to the extent that such exemption or reduction is granted for profits from industrial, construction, manufacturing or agricultural activities provided that the activities have been carried out within the Contracting State. The competent authorities may agree to extend the application of this provision also to other activities. The provisions of this paragraph shall apply only for the first ten years during which this Agreement is effective. This period may be extended by a mutual agreement between the competent authorities. Article 24 Non-Discrimination 1. Nation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or 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 provided for in the domestic laws of the Contracting State. 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 with each other for the elimination of double taxation in case not provided for in this Agreement. 4. The competent authorities of the Contracting S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 28 Entry into force 1. The Contracting State shall notify each other in writing, through diplomatic channels, the completion of the procedure required by the respective laws for the entry into force of this Agreement. 2. This Agreement shall enter into force thirty days after the receipt of the latter of the notifications referred to in paragraph 1 of this Article. 3. The provisions of this Agreement shall have effect : (a) In Russia : (i) in respect of taxes withheld at source, to income arising on or after the first day of January in the calendar year next following the year in which this Agreement enters into force; (ii) in respect of other taxes on income, to taxes arising for any fiscal year beginning on or after the first day of January next following the calendar year in which this Agreement enters into force. (b) In India : In respect of income arising in any fiscal year beginning on or after the first day of April next following the calendar year in which this Agreement enters into force. 4. The provisions of this Agreement between the Government of the Union of the Soviet Socialist Republics and the Government of the Republic of India for the avoidance of double taxati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates may invoke mutual agreement procedure referred to in the aforesaid clause in particular cases of supervisory activities relating to a project which satisfies the following conditions : (a) the project has been approved by the Government of the concerned Contracting State; (b) it is a turnkey project; (c) the fees for supervisory activities do not exceed 10 per cent of the total cost of the project, including the cost of the machinery and the equipment mentioned in the contract; (d) the total cost of the project is not less than US $ 10 million; (e) the duration of the project is for a period extending from 12 months to five years or such longer period as has been specified in the contract by the authority granting approval to the contract. The said time will include the further period which may be extended by the project approving authority in consultation with the competent authority of the concerned Contracting State; and (f) the enterprise is not involved in avoidance or evasion of tax in the Contracting State in which supervisory activities are being rendered. Where aforementioned conditions of sub-paragraphs (a) to (f) of this paragraph are fulfilled, the enterprise shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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