Ethiopia - Legal Draft

Double Taxation

Avoidance AgreementAgreement for

avoidance of Double Taxation of Income of Enterprises operating Aircraft

between the Government of the Republic of India and the Government of EthiopiaNotification

No. G.S.R. 8(E) dtd. 04.01.1978Whereas

the Government of India and the Provisional Military Government of Socialist

Ethiopia have concluded an Agreement, as set out in the Annexure hereto, for

the avoidance of double taxation of income of enterprises operating aircraft.And

whereas all the requirements have been completed in Ethiopia and India as are

necessary to give the said Agreement the force of law in Ethiopia and India

respectively, as required by paragraph 1 of Article, 3 of the said Agreement;And

whereas the letters to this effect have been exchanged between the said two

Governments, as required by paragraph 1 of Article 3 of the said Agreement;Now,

therefore, in exercise of the powers conferred by section 90 of the Income-tax

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 Agreement shall be given effect to in the Union of India.AnnexureAgreement

between the Government of the Republic of India for the Avoidance of Double

Taxation of Income of Enterprises Operating Aircraft for the Government of

India and the Government of Ethiopia.Desiring

to conclude an Agreement for the avoidance of double taxation of income of

enterprises operating aircraft chargeable to tax in the said countries in

accordance with their respective laws.Have

agreed is follows:ARTICLE

I1. 1.In this Agreement,

unless the context otherwise requires,a. the term "

Ethiopia " means the territory of Ethiopia and the various islands forming

part of Ethiopia, and includes the territorial sea and any other marine areas

adjacent thereto, including their seabed and sub-soil, over the resources of

which Ethiopia has, or may hereinafter have, sovereign rights in accordance

with international law;b. the term " India

" means the territory of India and includes the territorial sea and any

other marine areas adjacent thereto, including their seabed and sub-soil, over

the resources of which India has, or may hereinafter have, sovereign rights in

accordance with international law;c. the term " a

Contracting State " and the " other Contracting State " mean

Ethiopia or India, as the context requires;d. the term "

enterprise of a Contracting State " means:i.

an

airline designated by the Government of that State in pursuance of the

Agreement dated 3rd August, 1967 (as amended or revised from time to time)

between the Government of India and the Government of Ethiopia relating to air

services; orii.

an

airline which is authorised by the Government of that State by a general or special

arrangement between the two Contracting States to operate chartered flights

between or beyond their territories;a.b.c.d.e. the term "

international traffic " means any transport by an aircraft operated by an

enterprise of a Contracting State, except when the aircraft is operated solely

between places in the other Contracting State; andf. the expression "

operation of aircraft " means a business of transportation by air of

persons, livestock, goods or mail, carried on by the owners or lessers or

charterers of aircraft, including the sale of tickets for such transportation

on behalf of other enterprises and any other activity directly connected with

such transportation.1.2. In the application of

the provisions of this Agreement by one of the Contracting States, any term

used but not defined herein shall, unless the context otherwise requires, have

the meaning which it his under the laws in force in that State relating to the

taxes which are the subject of this Agreement.ARTICLE

II1. Under this Agreement,

income derived by an enterprise of a Contracting State from the operation of

aircraft in international traffic shall, on the principle of reciprocity, be

exempt from tax in the other Contracting State.2. Paragraph 1 shall

also apply in respect of participations in a pool, a joint venture or in any

other similar arrangement regarding air transport.3. For the purpose of

paragraph 1, interest on funds directly connected with the operation of

aircraft shall be regarded as income from the operation of such aircraft.4. For the, purpose of

this Article, the term " tax " shall mean income-taxes and any other

taxes, dues and levies on income which are imposed or may hereafter be imposed

on behalf of each Contracting State or of its political sub-divisions or local

authorities, irrespective of the manner in which they are imposed.ARTICLE

III1. This Agreement shall

be approved in accordance with the laws and practice in force in each of the

Contracting States. It shall enter into force on the date of the exchange of

letters certifying that the proper procedure was fulfilled in each Contracting

State. The exchange of letters shall take place at Addis Ababa as soon as

possible.2. This Agreement shall

have effect:a. In Ethiopia, in

respect of income derived from the operation of aircraft in international

traffic after 1st July, 1966.b. In India, in respect

of income derived from the operation of aircraft in international traffic after

1st July, 1966.ARTICLE

IVThis

Agreement shall continue in effect indefinitely but may be terminated by either

of the Contracting States with a written notice of six months. In such event,

the Agreement shall cease to be effective in respect of income derived from

operation of aircraft in international traffic after the 1st day of January

next following the date on which the said period of six months expires.In

witness whereof the undersigned, duly authorised thereto, have signed the

present Agreement.Done

in duplicate at New Delhi this 25th day of November, one thousand nine hundred

and seventy-six in the Amharic, English and Hindi languages, all the texts

being equally authentic, except that in the case of divergence of

interpretation the English text shall prevail.Sd

/- Sd/(Pranab

Kumar Mukherjee) (BERHANE S. A. DENEKE)For

the Government of the For the Provisional MilitaryRepublic

of India; Government of Socialist Ethiopia;Excellency,

With reference to the Agreement which is being signed today between the

Government of India and the Government of Ethiopia for the avoidance of double

taxation of income of enterprises operating aircraft, I have the honour to

state on behalf of the Government of India that whereas the said Agreement

provides for the exemption from tax in either Contracting State of the income

derived by an enterprise of the other Contracting State from operation of

aircraft in international traffic after 1st July, 1966, the two Contracting

States have agreed as follows:1. Ethiopia Airlines

being an enterprise of Ethiopia, any taxes paid by it or any deposits made by

it towards its tax dues in India in respect of its income for which it is

exempt from tax in accordance with the Agreement aforesaid shall be refunded by

the Government of India to Ethiopian Airlines on an application in this behalf

by Ethiopian Airlines within six months from the date on which the Agreement

aforesaid enters into force, and any proceedings already initiated for the

taxation of such income shall be terminated.2. Air India being an

enterprise of India, any taxes paid by it or any deposits made by it towards

its tax dues in Ethiopia in respect of its income for which it is exempt from

tax in accordance with the Agreement aforesaid shall be refunded by the

Government of Ethiopia to Air India on an application in this behalf by Air

India within six months from the date on which the Agreement aforesaid enters

into force, and any proceedings already initiated for the taxation of such

income shall be terminated.I

shall be grateful if Your Excellency will confirm your agreement with the

position as stated above and, in such case, this note and Your Excellency's

reply thereto shall be deemed to be part of the Agreement aforesaid.Please

accept, Excellency, the assurances of my highest consideration.Sd/-PRANAB

KUMAR MUKHERJEE,.TO,MR.

BERHANE, S. A. DENEKECharge-d'

Affaires, of Socialist Ethiopia,New

DelhiExcellency,I

have the honour to acknowledge receipt of your letter of today running as

follows:"

With reference to the Agreement which is being signed today between the

Government of India and the Government of Ethiopia for the avoidance of double

taxation of income of enterprises operating aircraft, I have the honour to

state on behalf of the Government of India that whereas the said Agreement

provides for the exemption from tax in either Contracting State of the income derived

by an enterprise of the other Contracting State from operation of aircraft in

international traffic after 1st July, 1966, the two Contracting States have

agreed as follows:---1. Ethiopian Airlines

being an enterprise of Ethiopia, any taxes paid by it or any deposits made by

it towards its tax dues in India in respect of its income for which it is

exempt from tax in accordance with the Agreement aforesaid shall be refunded by

the Government of India to Ethiopian Airlines on an application in this behalf by

Ethiopian Airlines within six months from the date on which the Agreement

aforesaid enters into force, and any proceedings already initiated for the

taxation of such income shall be terminated.2. Air India being an

enterprise of India, any taxes paid by it or any deposits made by it towards

its tax dues in Ethiopia in respect of its income for which it is exempt from

tax in accordance with the Agreement aforesaid shall be refunded by the

Government of Ethiopia to Air India on an application in this behalf by Air

India within six months from the date on which the Agreement aforesaid enters

into force and any proceedings already initiated for the taxation of such

income shall be terminated.I

shall be grateful if your Excellency will confirm your agreement with the

position as stated above and, in such case, this note and your Excellency's

reply thereto shall be deemed to be part of the Agreement aforesaid. "I

have the honour to confirm on behalf of the Government of Ethiopia, the

position as stated above. Your note of today's date and my reply thereto shall,

therefore, form a part of the Agreement.Accept,

Excellency, the assurances of my highest consideration.Sd/BERHANE

S. A. DENEKETo,SHRI

PRANAB KUMAR MUKHERJEEMinister

of Revenue and Banking,Government

of India,New

Delhi.[No.

2105/F. No. 145/15-71-FTD]In

the notification of the Ministry of Finance, Department of Revenue No. G.S.R.

8(E), dated the 4th January, 1978, published at pages 19 and 20 of the Gazette

of India, Extraordinary, Part II-Section 3-Sub-section (i), dated the 4th

January, 1978-1. At Page 19-i.

At

the end of the first paragraph of the notification, for the sign ". "

read "; ";ii.

in

the second paragraph of the notification, for the words "has force"

read "the force";iii.

in

the heading of the Annexure, for the words"AGREEMENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIAThe

Avoidance of Double Taxation of Income of Enterprises Operating Aircraft"read"AGREEMENT

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE PROVISIONAL MILITARY

GOVERNMENT OF SOCIALIST ETHIOPIA FOR THE AVOIDANCE OF DOUBLE TAXATION OF INCOME

OF ENTERPRISES OPERATING AIRCRAFT"i.ii.iii.iv.

in

the opening paragraph of the Annexure, delete the sign "." appearing

after the words "respective laws";v.

At

the end of the first line of Article 1, for the sign "." read

";";vi.

in

the second line of clause (b) of Article 1, for the word "territory"

read "territorial";vii.

in

the third line of clause (f) of Article 1, for the words "of lesses"

read "or leases";1.2. At page 20-i.

)in

the second paragraph of Article 4, for the words "in witness whereof"

read "IN WITNESS WHEREOF"[No.

2206/F.No.145/15/71-FTD]