Greece - Legal Draft

Double Taxation

Avoidance AgreementAgreement Between The

Government Of India And The Government Of Greece For The Avoidance Of Double

Taxation Of IncomeNotification

No.G.S.R. 394 dtd. 17.3.1967.Whereas

the annexed Agreement between the Government of India and the Government of

Greece for the avoidance of double taxation of income has been ratified and the

Instruments of ratification exchanged, as required by Article XX of the said

Agreement.Now,

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

Act, 1961 (43 of 1961), 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 India and the Government of Greece for the avoidance

of double taxation of income.Whereas

the Government of India and the Government of Greece desire to conclude an

Agreement for the avoidance of double taxation of income:Now,

therefore, it is hereby agreed as follows:ARTICLE

I1. 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 Income-tax Act,

1961 (43 of 1961) (hereinafter referred to as "Indian Tax");a.b. In Greece:the tax on physical persons and the income-tax on legal entities, and any

special tax levied in Greece with reference to freight earned by shipping

enterprises by the carriage of passengers, live-stock or goods, imposed under

the Royal Decrees No. 3323/1955 and 3843/1958 and the Law No. 1880/1951

(hereinafter referred to as " Greek Tax").1.2. The present Agreement

shall also apply to any other taxes of a substantially similar character

imposed in India or Greece subsequent to the date of signature of the present

Agreement.ARTICLE

II1. In the present

Agreement, unless the context otherwise requires:a. the term

"Greece" means the territory of the Kingdom of Greece;b. the terms "one

of the territories" and "the other territory" mean, Greece or

India as the context requires;c. the term

"person" includes natural persons, companies and all other entities

which are treated as taxable units under the tax laws in force in the

respective territories;d. the term

"company" means any entity which is treated as a body corporate or as

a company for tax purposes;e. the term

"tax" means the Greek tax or Indian tax, as the context requires;f. the terms

"resident of Greece" and "resident. of India" mean,

respectively, a person who is resident in Greece for the purposes of Greek tax

and not resident in India for the purposes of Indian tax, and a person who is

resident in India for the purposes of Indian tax and not resident in Greece for

the purposes of Greek tax. A company shall be regarded as resident in Greece if

it is incorporated in Greece or its business is wholly managed and controlled

in Greece; a company shall be regarded as resident in India if it is

incorporated in India or its business is wholly managed and controlled in

India.g. the terms "Greek

enterprise" and "Indian enterprise" mean, respectively, an

industrial or commercial enterprise or undertaking carried on by a resident of

Greece and an industrial or commercial enterprise or undertaking carried on by

a resident of India; and the terms "enterprise of one of the

territories" and "enterprise of the other territory" mean a

Greek enterprise or an Indian enterprise, as the context requires;h. the term

"permanent establishment" means a fixed place of business in which

the business of the enterprise is wholly or partly carried on;aa. the term "fixed

place of business" shall include a place of management, a branch, an

office, a factory, a workshop, a warehouse, a mine, quarry or other place of

extraction of natural resources;ab.bb. an enterprise of one

of the territories shall be deemed to have a fixed place of business in other

territory if it carries on in that other territory a construction, installation

or assembly project or the like;ac.bc.cc. the use of mere

storage facilities or the maintenance of a place of business exclusively for

the purchase of goods or merchandise and not for any processing of such goods

or merchandise in the territory of purchase, shall not constitute a permanent

establishment;ad.bd.cd.ad.bd.cd.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 of that enterprise in the

first-mentioned territory, 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, or2. 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, or3. he habitually secures orders in the

first-mentioned territory wholly or almost wholly for the enterprise itself or

for the enterprise and other enterprise which are controlled by it or have a

controlling interest in it.ae.be.ce.de.ee. A broker of a

genuinely independent status who merely acts as an intermediary between an

enter prise of one of the territories and a prospective customer in the other

territory shall not be deemed to be a permanent establishment of the enterprise

in the last-mentioned territory.af.bf.cf.df.ef.ff. The fact that a

company, which is a resident of one of the territories, has a subsidiary

company which either is a resident of the other territory or carries on a trade

or business in that other territory (whether through a permanent establishment

or otherwise), shall not, of itself constitute that subsidiary company a

permanent establishment of its parent company.a.b.c.d.e.f.g.h.i. The term

"pension" means a periodic payment made in consideration of services

rendered or by way of compensation for injuries received;j. the term

"annually" means a stated sum payable periodically at stated time

during life or during a specified or ascertainable, period of time under an

obligation to make the payments in return for adequate and full consideration

in money or money's worth;k. the term

"competent authority" means in the case of India, the Central

Government in the Ministry of Finance, Department of Revenue, or its authorised

representative and in the case of Greece, the Ministry of Finance or its

authorised representative.1.2. In the application of

the provisions of this Agreement in one of the territories any term not

otherwise defined in this Agreement shall, unless the context otherwise requires,

have the meaning which it has under the laws in force in that territory

relating to the taxes which are the subject of this Agreement.ARTICLE

III1. Subject to the

provisions of paragraph (3) below, tax shall not be levied in one of the

territories on the industrial or commercial profits of an enterprise of the

other territory unless profits are derived in the first-mentioned territory

through a permanent establishment of the said enterprise situated in the

first-mentioned territory. If profits are so derived, tax may be levied in the

first-mentioned territory on the profits attributable to the said permanent

establishment.2. There shall be

attributed to the permanent establishment of an enterprise of one of the

territories situated in the other territory the industrial or commercial

profits which it might be expected to derive in that other territory if it were

an independent enterprise engaged in the same or similar activities under the

same or similar conditions and dealing at arm's length with the enterprise of

which it is a permanent establishment. In any case, where the correct amount of

profits attributable to a permanent establishment is incapable of determination

or the ascertainment thereof presents exceptional difficulties, the profits

attributable to the establishment may be estimated on a reasonable basis.3. For the purpose of

this Agreement the term "industrial or commercial profits" shall not

include income in the form of rents, royalties, interest, dividends, management

charges, remuneration for labour or personal services or income from the

operation of ships or aircraft.ARTICLE

IVWhere---a. an enterprise of one

of the territories, participates directly or indirectly in the management,

control or capital of an enterprise of the other territory, orb. the same persons

participate directly or indirectly in the management, control or capital of an

enterprise of one of the territories and an enterprise of the other territory,

andin

either case conditions are made or imposed between the two enterprises, in

their commercial or financial relations which differ from those which would be

made between independent enterprises, then any profits which but for those

conditions would have accrued to one of the enterprises but by reason of those

conditions have not so accrued may be included in the profits of that

enterprise and taxed accordingly.ARTICLE

V1. Income derived from

the operation of aircraft by an enterprise of one of the territories shall not

be taxed in the other territory, unless the aircraft is operated wholly or,

mainly between places within that other territory.2. Paragraph (1) shall

likewise apply in respect of participations in pools of any kind by enterprises

engaged in air transport.ARTICLE

VI1. When a resident of

Greece, operating ships, derives profits from India through such operations

carried on in India, such profits may be taxed in Greece as well as in India;

but the tax so charged in India shall be reduced by an amount equal to 50 per

cent thereof, and the reduced amount of Indian tax payable on the profits shall

be allowed as a credit against Greek tax charged in respect of such income. The

credit aforesaid shall not exceed the Greek tax charged in respect of such

income.2.a. When a resident of

India, operating ships, derives profits from Greece, through such operations

carried on in Greece, such profits may be taxed in Greece as well as in India,

but the tax so charged in Greece shall be reduced by an amount equal to 50 per

cent thereof and the reduced amount of Greek tax payable shall be allowed as a

credit against Indian tax charged in respect of such income. The credit

aforesaid shall not exceed the Indian tax charged in respect of such income.b. Sub-clause (a) of

clause (2) shall not, however, apply as long as the laws in Greece do not

impose any tax on income derived from the operation of ships belonging to

foreign enterprises operating in the Greek territory; in such cases, the only

in India.1.2.3. Paragraphs (1) and

(2) shall not apply to profits arising as a result of coastal traffic.4. The provisions of

clause (1) shall not in case of India affect the application of sub-section (1

to (6) of section 172 of the Income-tax Act, 1961 for the assessment of profits

from occasional shipping or tramp steamers; but the provisions of that clause

will be applied, when an adjustment is to be made under sub-section (7) of the

aforesaid section of the Income-tax Act, 1961 in such cases.ARTICLE

VIIRoyalties

derived by a resident of one of the territories from sources in the other

territory may be taxed only in that other territory.In

this Article, the term "Royalty" means any royalty or other like

amount received as consideration for the right to use copyrights, artistic or

scientific works, cinematographic films, patents, models, designs, plans,

secret processes or formulae, trade-marks and other like property or rights,

but does not include any royalty or other like amount in respect of the

operation of mines, quarries or other natural resources.ARTICLE

VIIIDividends

paid by a company which is a resident of one of the territories to a resident

of the other territory may be, taxed only in the first-mentioned territory.ARTICLE

IXInterest

on bonds, securities, notes, debentures or any other form of indebtedness,

derived by a resident of one of the territories from sources in the other

territory may be taxed only in that other territory.ARTICLE

XIncome

from immovable property may be taxed only in the territory in which the

property is situated. For this purpose any rent or royalty or other income

derived from the operation of a mine, quarry or any other place of extraction

of natural resources shall be regarded as income from immovable property.ARTICLE

XICapital

gains derived from the sale, exchange or transfer of a capital asset, whether

movable or immovable, may be taxed only in the territory in which the capital

asset is situated at the time of such sale, exchange or transfer.ARTICLE

XII1. Remuneration other

than pensions and annuities, paid in Greece for services rendered therein out

of public funds of India shall not be taxed in Greece unless the payment is

made to a citizen of Greece.2. Remuneration other

than pensions and annuities, paid in India for services rendered therein out of

public funds of Greece 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 other

than pensions and annuities paid by the Reserve Bank of India, the Public

Railways Authorities and the Postal Administration of India and by the Bank of

Greece, Greek State Railways and the Greek Postal and Telegraphic

Administration.ARTICLE

XIIIAny

pension or annuity derived by a resident of one of the territories from sources

in the other territory may be taxed only in that other territory.ARTICLE

XIV1. Profits or

remuneration for professional services or for services as an employee

(including services as a director) performed in one of the territories by an

individual who is a resident of the other territory may be taxed only in the

territory in which such services are performed.2. An individual who is

a resident of India shall not be taxed in Greece on profits or remuneration

referred to in paragraph (1) if---a. he is temporarily

present in Greece for a period or periods not exceeding in the aggregate 183

days during the calendar year immediately preceding the relevant fiscal year,b. the services are

performed for or on behalf of a resident of India,c. the profits or

remuneration are subject to Indian tax, andd. the profits or

remuneration are not deducted in computing the profits of an enterprise

chargeable to Greek tax.1.2.3. individual who is a

resident of Greece shall not be taxed in India on the profits or remuneration

referred to in paragraph (1) if---a. he is temporarily

present in India for a period or periods not exceeding in the aggregate 183

days during the relevant "previous year",b. the services are

rendered; for or on behalf of a resi dent of Greece,c. the profits or

remuneration are subject to Greek tax, andd. the profits or

remuneration are not deducted in computing the profits of an enterprise

chargeable to Indian tax.1.2.3.4. Where an individual

permanently or predominantly performs services on ships or aircraft in

international traffic operated by an enterprise of one of the territories, profits

or remuneration from such services may be taxed, only by the country of which

the individual is resident.ARTICLE

XVA

professor or teacher from one of the territories, who receives remuneration for

teaching, during a period of temporary residence not exceeding two years, at a

University, College, School or other educational institution in the other

territory, shall not be taxed in that other territory in respect of that

remuneration.ARTICLE

XVIAn

individual from one of the territories who is temporarily present in the other

territory solely---a. as a student at a

university, college or school in such other territory,b. as a business

apprentice, orc. as the recipient of a

grant, allowance or award for the primary purpose of study or, research from a

religious, charitable scientific or educational organisation shall not be taxed

in the other territory in respect of remittances from abroad for the purposes

of his maintenance, education or training in respect of a scholarship, and in

respect of any amount representing remuneration for services rendered in that

other territory, provided that such services are in connection with his studies

or training or are necessary for the purpose of his maintenance.ARTICLE

XVII1. The laws in force in

either of the territories will continue to govern the assessment and taxation

of income in the respective territories except where express provision to the

contrary is made in this Agreement.2. Subject to the

provisions of Article VI income from sources within Greece which under the laws

of Greece and in accordance with this Agreement is subject to tax in Greece

either directly or by deduction shall not be subject to Indian tax.3. Subject to the

provisions of Article VI income from source within India which under the laws

of India and in accordance with this Agreement is subject to tax in India

either directly or by deduction shall not be subject to Greek tax.4. The graduated rate of

Greek tax to be imposed on residents of Greece and the graduated rate of

Indian, tax, to be imposed on residents of India may be calculated as though

income which under this Agreement is not subject to Greek or Indian tax, as the

case may be, were included in the amount of the total income.ARTICLE

XVIIIThe

competent authorities shall exchange such information (being information which

is at their disposal under their respective taxation laws in the normal course

of administration) as is necessary for carrying out the provisions of the

present Agreement. Any information so exchanged shall be treated as secret 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

XIXWhere

a resident of one of the territories shows proof that the action of the

taxation authorities of the other territory has 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 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

XX1. The present Agreement

shall be ratified and the instruments of ratification shall be exchanged at New

Delhi as soon as possible.2. Upon exchange of the

instruments of ratification, the present Agreement shall have effect:-a. in India, for any

year of assessment, beginning on or after the 1st April, 1964,b. in Greece, for any

fiscal year, beginning on or after the 1st January, 1964.ARTICLE

XXIThis

Agreement shall continue in effect indefinitely but either of the Contracting

Parties may on or before the 30th day of June in any calendar year after 1965

give to the other Contracting Party notice of termination, and in such event

this Agreement shall cease to be effective-a. in India, for any

year of assessment beginning on or after the 1st April in the calendar year

next following such written notice of termination,b. in Greece, for any

fiscal year beginning on or after the 1st January next following such written

notice of termination.In

witness whereof the undersigned duly authorised thereto have signed this

Agreement and have affixed thereto their seals.Done

at New Delhi on the 11th February, 1965; in duplicate in the English language.For

the Republic of India: For the Royal Government of Greece:Sd/-

RAMESHWAR SAHU, Sd/- GEORGE WARSAMY,Deputy

Minister of Finance, Ambassador of Greece,Government

of India. New Delhi.