AAR holds payment by Streia (India) Ltd. (applicant) to Groupe Steria, France for management services taxable as Fees for Technical Services (‘FTS’) under. THE AYOIDANCE OF DOUBLE TAXATION – AN EVALUATION. Mahesh C. Bijawat*. THE RECENT AGREEMENT between India and France for the avoidance of. Get comprehensive agreements & Tax information exchange agreement between different countries & India to know how Non-resident can claim tax benefits.
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The Convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date ijdia signature of the present Convention in addition to, or in place of, the taxes referred to in paragraph 1.
Such tax credit shall be equal: Gains from, francd 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. Newsletters may offer personalized content or advertisements. However, it shall not exceed the amount of French tax attributable to such income.
Capital represented by immovable property referred to in article 6 or rights treated as immovable property, owned by a resident of a Contracting State and situated in the other Contracting State, may be taxed in that other Contracting State. This Protocol provides that the states shall notify each other of the completion of the procedures required under their respective laws for the protocol to come into force.
If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other Contracting State.
Earning Outside India? DTAA Could Save You From Double Taxation | HuffPost India
Notwithstanding the provisions of paragraph 2: 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 francr other provisions of this Convention.
Under this method, the country in which the taxpayer is a resident, allows him a deduction from the taxable income, on account of the taxes paid in another country on his foreign source.
The Indian tax shall not be deductible from such income. This is achieved by adopting the various methods listed below:. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
Notwithstanding the provisions of indja 2 fracne Articles 7, 15 and 16, where income in respect of draa activities exercised by an entertainer or an athlete in his capacity as such in a Contracting State accrues not to the entertainer or athlete 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.
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Content Home About us. The restriction was only on the rates.
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. 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. Now, therefore, in exercise of the powers conferred by section dtax of the Income-tax Act, 43 induasection 24A of the Companies Profits Surtax Act, 7 of and 44A of the Wealth-tax Act, 27 ofthe Central Government hereby directs that all the provisions of the said Convention shall be given effect to in the Union of India.
For the purposes of this Convention, 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 criterion of a similar nature.
Where a resident of India derives income which, in accordance with the provisions of this Convention shall be taxable only in France, India may include this income in the tax base but shall allow as a deduction from the income tax that part of the income tax which is attributable to the income derived from France.
Provided that where the law of the Contracting State in which the permanent establishment is situated imposes a restriction on the amount of the executive and general administrative expenses which may be allowed, and that restriction is relaxed or overridden by any Convention, Agreement or Protocol signed after 1st January,between that Contracting State and a third State which is a member of the OECD, the competent authority of that Contracting State shall notify the competent authority of the other Contracting State of the terms of the corresponding paragraph in the Convention, Agreement or Protocol with that third State immediately after the entry into force of that Convention, Agreement or Protocol and, if the competent authority of the other Contracting State so requests, the provisions of that paragraph shall apply under this Convention from that entry into force.
India has tax treaties with many countries, some of which provide for exemption of certain incomes from double taxation. Doing business in India. The term “payments for the use of equipment” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, industrial, commercial or scientific equipment.
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 in respect of services rendered to that Contracting State or subdivision or authority shall be taxable only in that Contracting State. Tax Hotline Allotment of shares to existing shareholder at less than market value not taxable under section 56 2 vii where allotment not disproportionately higher than existing shareholding proportion, and part of genuine business transaction December 28, Get our top news delivered to your inbox every morning, Monday to Friday.
Where however, the person paying the royalties, fees for technical services or the payments for the use of equipment, whether he is a resident of a Contracting State or not has in a Contracting State a permanent establishment or a fixed base in connection with which the contract under which the royalties, fees for technical services or the payments for the use of equipment are paid was concluded, and such royalties, fees for technical services or payments for the use of equipment are borne by such permanent establishment or fixed base, then such royalties, fees for technical services or payments for the use of equipment shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.
The provisions of this sub-paragraph shall not apply where tax is deemed to be paid in India according to the provisions of sub-paragraphs c and d.
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 indi situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base.
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 nidia 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 to the last mentioned amount.
Double Taxation Avoidance Agreement – DTAA
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. This is achieved by adopting the various methods listed below: No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
For the purposes of this, provision, immovable property pertaining to the industrial or commercial operation of such company shall not be taken into account. Ships, boats and aircraft shall not be regarded as immovable property. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State.
In such case, the provisions of Article 7 or Article 15, as the case may be, shall apply. If it appears that such a situation results in taxation which is not comparable to taxation on net income, that competent authority may allow the non credited amount of tax paid in India as a deduction from the French tax levied on other income from foreign sources derived by that resident. Article 4 RESIDENT For the purposes of this Convention, 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 criterion of a similar nature.
Limited Agreements Agreement for avoidance of double taxation of income of enterprises operating aircraft with Afghanistan Whereas the Government of India and the Government of Afghanistan have.
For the purpose of this article, interest on funds connected with the operation of aircraft in international traffic shall be regarded as profits derived from the operation of such aircraft, and the provisions of article 12 shall not apply in relation to such interest.
When the prepayment pre-compute is levied in respect of dividends paid by a company which is a resident of France to a resident of India who is not entitled to the payment from the French Treasury referred to in paragraph 3 of this article with respect to such dividends, such resident shall be entitled to the refund of that prepayment, subject to the deduction of the withholding tax with respect to the refunded amount in accordance with paragraph 2 of this Article.
A building site or construction, installation or assembly project constitutes a permanent establishment only where such site or project continues for a period of more than six months.
Whereas the annexed Convention between the Government of the Republic of India and the Government of the French Republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital has come into force on the 1st day of August,on the notification by both the Contracting States to each other of the completion of the procedures required under their law for bringing into force of the said Convention in accordance with paragraph 1 of article 30 of the said Convention.
This is the most commonly used method of providing relief from double taxation and finds place in almost all the tax treaties. The provisions of sub-paragraph a of this paragraph shall not apply if the recipient of the payment from the French Treasury provided for in sub-paragraph a of this paragraph is not subject to Indian tax in respect of the payment. Notwithstanding the provisions of paragraphs 1 and 2, items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Convention, and arising in the other Contracting State may be taxed in that other Contracting State.
Do remember that each DTAA has some or the other beneficial provision which can help in avoiding double taxation.
Comprehensive Agreements Agreement for Avoidance of Double Taxation and prevention of fiscal evasion with Armenia Whereas the annexed Convention between the Government of the Republic of India and the. A professor, teacher, or a research scholar who is or was a resident of one of the Contracting States 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 taxable only in the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding two years from the date of his arrival in that other Contracting State.
Capital represented by 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. This would imply that the income is not included in taxable income at all.