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TMI BlogAgreement between the government of India and the government of the federal republic of Germany for the avoidance of double taxation of incomeX X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, it is hereby agreed as follows : ARTICLE I (1) The taxes which are the subject of the present Agreement are : (a) in India : the income-tax, the super tax, the surcharge, imposed under the Indian Income-tax Act, 1922 (11 of 1922) (herein- after referred to as Indian tax ); (b) in the Federal Republic of Germany : the Einkommensteuer (income tax), the Korperschaftstouer (corporation tax), the Notopfer Berlin (Berlin emergency aid tax) (hereinafter referred to as Federal Republic tax ). (2) The present Agreement shall also apply to any other taxes of a substantially similar character imposed in India or the Federal Republic of Germany subsequent to the date of signature of the present Agreement. ARTICLE II (1) In the present Agreement, unless the context otherwise requires: (a) the term Federal Republic means the Federal Republic of Germany; the territory of the Federal Republic of Germany means the territory in which the Basic Law for the Federal Republic of Germany is in force ; (b) the terms India and the territory of India shall have the meanings assigned to them in Article I of the Constitution of India; (c) the terms one of the territories and the other territory m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not constitute a permanent establishment. (dd) A person acting in one of the territories for or on behalf of an enterprise of the other territory shall be deemed to be a permanent establishment in the first-mentioned territory, but only if 1. he has and habitually exercises in the first-mentioned territory a general authority to negotiate and enter into contracts for or on behalf of the enterprise, unless the activities of the person are limited exclusively to the purchase of goods or merchandise for the enterprise, or 2. he habitually maintains in the first-mentioned territory a stock of goods or merchandise belonging to the enterprise from which the person regularly delivers goods or merchandise for or on behalf of the enterprise, or 3. he habitually secures orders in the first-mentioned territory, exclusively or almost exclusively, for the enterprise itself, or for the enterprise and other enterprises which are controlled by it or have a controlling interest in it. (ee) A broker of a genuinely independent status who merely acts as an intermediary between an enterprise of one of the territories and a prospective customer in the other territory shall not be deemed to be permanent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination, or the ascertainment thereof presents exceptional difficulties the profits attributable to the establishment may be estimated on a reasonable basis. (3) For the purposes of this Agreement the term industrial or commercial profits shall not include income in the form of rents, royalties, interests, dividends, management charges, remuneration for labour or personal services or income from the operation of ships or aircraft but shall include rents or royalties in respect of cinematographic films. ARTICLE IV Where a resident of one of the territories carries on business with a resident of the other territory and it appears to the taxation authorities of the first-mentioned territory that owing to the close connection between such persons the course of business is so arranged that the business done produces to the resident of the first-mentioned territory either no profits or less than ordinary profits which might be expected to arise in that business, tax shall be leviable in the former territory on such profits as may reasonably be deemed to have arisen therefrom. ARTICLE V (1) Income derived from the operation of aircraft by an enterprise of one of the territories shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensions and annuities, paid out of public funds of the Federal Republic or its Laender or political sub- divisions thereof in respect of present or past services shall not be taxed in India unless the payment is made to a citizen of India. (3) The provisions of paragraphs (1) and (2) of this Article shall not apply to payments in respect of services in connection with any trade or business carried on by either of the Contracting Parties or political sub-divisions thereof for purposes of profit. (4) The provisions of paragraphs (1) and (2) of this Article shall also apply to remuneration, including pensions and annuities, paid by the Federal Bank, the Federal Railways and the Postal Administration of the Federal Republic and the corresponding organisations of India. ARTICLE XII (1) Profits or remuneration from professional services (including services as a director) or from services as an employee derived by an individual who is a resident of one of the territories maybe taxed in the other territory only if such services are rendered in that other territory. (2) An individual who is a resident of India shall not be taxed in the Federal Republic on profits or remuneration referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y amount representing remuneration for an employment in that other territory. (2) An individual from one of the territories who is temporarily present in the other territory for a period not exceeding one year, as an employee of, or under contract with, an enterprise of the former territory or an organisation referred to in paragraph (1) sub- paragraph (c) above, solely to acquire technical, professional or business experience from a person other than such enterprise or organisation, shall not be taxed in that other territory on remuneration for such period, unless the amount thereof exceeds 15,000 DM or its equivalent in Indian currency. (3) An individual from one of the territories temporarily present in the other territory under arrangements with the Government of that other territory solely for the purpose of training, research or study shall not be taxed in that other territory on remuneration received in respect of such training, research or study, unless the amount thereof exceeds 25,000 DM or its equivalent in Indian currency. ARTICLE XVI (1) The laws in force in either of the territories will continue to govern the assessment and taxation of income in the respective territ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and shall not be disclosed to any persons other than those concerned with the assessment and collection of the taxes which are the subject of the present Agreement. No information as aforesaid shall be exchanged by the competent authority of one of the territories which would disclose any trade, business, industrial or professional secret or any trade process to the authority of the other territory. ARTICLE XVIII Where a resident of one of the territories shows proof that the action of the taxation authorities of the other territory resulted or will result in double taxation contrary to the provisions of the present Agreement, he shall be entitled to present his case to the competent authority of the territory of which he is a resident. Should his claim be deemed worthy of consideration, the competent authority to which the claim is made shall endeavour to come to an agreement with the competent authority of the other territory with a view to avoiding double taxation. ARTICLE XIX (1) This Agreement shall apply to Land Berlin provided that the Government of the Federal Republic of Germany has not delivered a contrary declaration to the Government of India within three months from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to includes an employee as well as a person who, though being of independent status, performs activities similar to those of an employee. 2. Article II(I)(i)(dd)(3) The term almost exclusively shall be understood to mean that the person's activities for or on behalf of enterprises other than those referred to therein are of such minor importance in relation to his activities for or on behalf of the enterprises mentioned therein that for all practical purposes such person may be regarded as working solely for or on behalf of the latter enterprises. Enterprises controlled by the same person shall be treated as one enterprise. I should be grateful if you would confirm your agreement with the above definitions and that, in such case, this note and your reply thereto should be deemed to be part of the Agreement. Please accept, Mr. Ambassador, the assurance of my high consideration. DR. B. GOPALA REDDY. To His Excellency Dr. W. Melchers, Ambassador of the Federal Republic of Germany in India, New Delhi. New Delhi, the 18th March, 1959. Mr. Minister, With reference to the Agreement, signed to-day, between the Government of the Federal Republic and the Government of India for the Avoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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