Iran Legal Draft Template

Double Taxation

Avoidance AgreementAgreement between the

Government of India and the Imperial Government of Iran through exchange of

notes for the avoidance of double taxation of income of enterprises operating

aircraftNotification

No. dtd. G.S.R. 284(E) 28.5.1973.Whereas

the Government of India and the Imperial Government of Iran have concluded an

agreement through exchange of notes as set out in the Annexure hereto, for the

avoidance of double taxation of income of enterprises operating aircraft;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.ANNEXUREAgreed

translation of the Note No. 127/18, dated the 29th March, 1973 received from

the Imperial Government of Iran by the Government of India:-"The

Imperial Ministry of Foreign Affairs presents its compliments to the Embassy of

India and with reference to the discussions and corresponding notes exchanged

regarding the reciprocal exemption of Indian and Iranian airlines from payment

of income-tax has the honour to state;According

to the Direct Tax Law of 19 March 1967, foreign air companies may be exempted

from payment of income-tax on a reciprocal basis; and in fact considering that

no income-tax has been collected from Iranian air companies in India, the

Iranian Government has to this date refrained from collecting income-tax from

Indian air companies.Thus,

as the provisions of reciprocity prescribed in the Direct Tax Law, has been in

fact established, as long as the said provision observed by the Indian

Government, Indian air companies will be, as before, exempted from the payment

of tax derived from the transportation of goods and passengers.It

is, therefore, proposed that should the above be agreed to, this Note and the

Embassy's reply regarding the application and observance of reciprocity by the

Government of India may be cansidered as a temporary agreement between the two

parties in respect of exemption from payment of income-tax by the air companies

of both parties."Note

No. TEH/ COM/203/6/70, dated the 1st April, 1973 issued by the Government of

India to the Imperial Government of Iran in reply:"The

Embassy of India presents its compliments to the Imperial Ministry of Foreign

Affairs and in regards to the question of reciprocal exemption of Indian and

Iranian airlines from payment of income-tax, has the honour to refer to their

Note No. 127/18, dated March 29, 1973, which reads as follows:-------"The

Imperial Ministry of Foreign Affairs presents its compliments to the Embassy of

India and with reference to the discussions and corresponding notes exchanged

regarding the reciprocal exemption of Indian and Iranian airlines from payment

of income-tax has the honour to state:According

to the Direct Tax Law of 19 March 1967, foreign air companies may be exempted

from payment of income-tax on a reciprocal basis, and in fact considering that

no income-tax has been collected from Iranian air companies in India, the

Iranian Government has to this date refrained from collecting income-tax from

Indian air companies.Thus,

as the provisions of reciprocity prescribed in the Direct Tax Law, has been in

fact established, as long as the said provision is observed by the Indian

Government, Indian air companies will be, as before, exempted from the payment

of tax derived from the transportation of goods and passengers.It

is, therefore, proposed that should the above be agreed to, this Note and the

Embassy's reply regarding the application and observance of reciprocity by the

Government of India may be considered as a temporary agreement between the two

parties in respect of exemption from payment of income-tax by the air companies

of both parties."With

reference to this proposal, the Embassy of India has the honour to inform the

Imperial Ministry of Foreign Affairs that the Government of India accepts the

terms of the foregoing text and considers that that Note and this Note will

constitute an agreement between the two Governments for the avoidance of double

taxation of income of enterprises operating aircraft, which shall enter into

force on this date, pending the conclusion of a general agreement for the

avoidance of double taxation of income from various sources including civil

aviation.In

accord with the purpose of the Notes now exchanged, the Embassy of India has

the honour to stress the fact that acceptance by the Government of India is

based on the understanding that the exemption in respect of income derived from

operation of aircraft in international traffic by Indian airline companies and

Iranian airline companies, shall be on the basis of reciprocity and shall apply

from the beginning of operation of these airlines in Iran and India

respectively and that in case any tax on the aforesaid income has been

recovered by either Government as of the date of this agreement, the same shall

be refunded by that Government.The

Embassy of India avails itself of this opportunity to renew to the Imperial

Ministry of Foreign Affairs the assurances of its highest consideration.