Kazakstan - Legal Draft

Double Taxation

Avoidance AgreementIncome-tax Act, 1961:

Notification under section 90: Convention between the Government of the

Republic of India and the Government of the Republic of Kazakstan for the

avoidance of double taxation and for the prevention of fiscal evasion with

respect to taxes on income and on capitalNotification

No. G. S. R. No. 633(E), dtd. 31st October, 1997.Whereas

the annexed Convention between the Government of the Republic of Kazakstan and

the Government of the Republic of India for the avoidance of Double Taxation

and the prevention of fiscal evasion with respect to taxes on income and on

capital will enter into force on the second day of October, 1997, thirty days

after the receipt of the latter of notifications by both the Contracting States

to each other of the completion of the procedures required under their laws for

bringing into force the said Convention in accordance with Article 30 of the

said Convention;Now,

therefore, in exercise of the powers conferred under section 90 of the

Income-tax Act, 1961 (43 of 1961) and section 44A of the Wealth-tax Act, 1957

(27 of 1957), the Central Government hereby directs that all the provisions of

the said Convention shall be given effect to in the Union of India.CONVENTION

BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE

REPUBLIC OF KAZAKSTAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND FOR THE

PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITALThe

Government of the Republic of India and the Government of the Republic of

Kazakstan desiring to conclude a Convention for the avoidance of double

taxation and for the prevention of fiscal evasion with respect to taxes on

income and on capital,Have

agreed as follows:Article

1PERSONAL

SCOPEThis

Convention shall apply to persons who are residents of one or both of the

Contracting States.Article

2TAXES

COVERED1. This Convention shall

apply to taxes on income and on capital imposed on behalf of a Contracting

State or of its political sub-divisions or local authorities irrespective of

the manner in which they are levied.2. There shall be

regarded as taxes on income and on capital all taxes imposed on total income,

on total capital, or on elements of income or of capital, including taxes on

gains from the alienation of movable or immovable property, taxes on the total

amounts of wages or salaries paid by enterprises as well as taxes on capital

appreciation.3. The existing taxes to

which the Convention shall apply are in particular:a. In the Republic of

Kazakstan:i.

the

tax on income of legal persons and individuals;ii.

the

tax on the property of legal persons and individuals;(hereafter

referred to as "Kazakstan tax");b. In the Republic of

India:i.

the

income-tax, including any surcharge thereon; andii.

the

tax on capital (the wealth-tax);(hereafter

referred to as "Indian tax").1.2.3.4. The Convention shall

apply also to any identical or substantially similar taxes which are imposed

after the date of signature of the Convention in addition to, or in place of,

the existing taxes. The competent authorities of the Contracting States shall

notify each other of any significant changes which have been made in their

respective taxation laws.Article

3GENERAL

DEFINITIONS1. For the purposes of

this Convention, unless the context otherwise requires:a. the terms:i.

"Kazakstan"

means the Republic of Kazakstan, and when used in a geographical sense, the

term "Kazakstan" includes the territorial waters, and also the

exclusive economic zone and continental shelf in which Kazakstan, for certain

purposes, may exercise sovereign rights and jurisdiction in accordance with

international law and in which the laws relating to Kazakstan tax are

applicable;ii.

"India"

means the territory of India and includes the territorial sea and airspace

above it, as well as any other maritime zone in which India has sovereign

rights, other rights and jurisdiction, according to the Indian law and in

accordance with international law, including the U. N. Convention on the Law of

the Sea;a.b. the term

"person" includes an individual, a company, a body of persons or any

other entity which is treated as a taxable unit under the taxation laws in

force in the respective Contracting States;c. the term

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

a body corporate for tax purposes;d. the terms "a

Contracting State" and "the other Contracting State" mean

Kazakstan or India, as the context requires;e. the terms

"enterprise of a Contracting State" and "enterprise of the other

Contracting State" mean respectively an enterprise carried on by a

resident of a Contracting State and an enterprise carried on by a resident of

the other Contracting State;f. the term

"international traffic" means any transport by a ship or aircraft

operated by an enterprise which is a resident of a Contracting State, except

when the ship or aircraft is operated solely between places in the other

Contracting State;g. the term

"competent authority" means:i.

in

Kazakstan, the Ministry of Finance or its authorized representative;ii.

in

India, the Central Government in the Ministry of Finance (Department of

Revenue) or their authorized representative;a.b.c.d.e.f.g.h. the term

"national" means:i.

any

individual possessing the nationality of a Contracting State;ii.

any

legal person, partnership or any other association deriving its status as such

from the laws in force in a Contracting State.a.b.c.d.e.f.g.h.i. the term "fiscal

year" means:i.

in

the case of India, "previous year" as defined under section 3 of the

Income-tax Act, 1961;ii.

in

the case of Kazakstan, the calendar year;a.b.c.d.e.f.g.h.i.j. the term

"tax" means Indian tax or Kazak tax, as the context requires, but

shall not include any amount which is payable in respect of any default or

omission in relation to the taxes to which this Convention applies or which

represents a penalty imposed relating to those taxes.1.2. As regards the

application of the Convention at any time by a Contracting State any term not

defined therein shall, unless the context otherwise requires, have the meaning which

it has at that time under the law of that State concerning the taxes to which

the Convention applies.Article

4RESIDENT1.

For

the purposes of this Convention, the term "resident of a Contracting

State" means any person who, under the laws of that State, is liable to

tax therein by reason of his domicile, residence, place of management, place of

incorporation, or any other criterion of a similar nature.But

this term does not include any person who is liable to tax in that State in

respect only of income from sources in that State or capital situated therein.1.2. Where by reason of

the provisions of paragraph 1 an individual is a resident of both Contracting

States, then his status shall be determined as follows:a. he shall be deemed to

be a resident of the State in which he has a permanent home available to him;

if he has a permanent home available to him in both States, he shall be deemed

to be a resident of the State with which his personal and economic relations

are closer (centre of vital interests);b. If the State in which

he has his centre of vital interests cannot be determined, or if he has not a

permanent home available to him in either State, he shall be deemed to be a

resident of the State in which he has an habitual abode;c. if he has an habitual

abode in both States or in neither of them, he shall be deemed to be a resident

of the State of which he is a national;d. if he is a national

of both States or of neither of them, the competent authorities of the

Contracting States shall settle the question by mutual agreement.1.2.3. Where by reason of

the provisions of paragraph 1 a person other than an individual is a resident

of both Contracting States, then it shall be deemed to be a resident of the

State in which its place of effective management is situated. If the State in

which its place of effective management is situated cannot be determined, then

the competent authorities of the Contracting States shall settle the question

by mutual agreement.Article

5PERMANENT

ESTABLISHMENT1. 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.2. The term

"permanent establishment" includes especially:a. a place of

management;b. a branch;c. an office;d. a factory;e. a workshop;f. a mine, an oil or gas

well, a quarry or any other place of extraction of natural resources;g. a sales outlet;h. a warehouse in

relation to a person providing storage facilities for others and;i. a farm, plantation or

other place where agricultural, forestry, plantation or related activities are

carried on.1.2.3. The term

"permanent establishment" also includes:a. a building site or

construction or installation or assembly project, or supervisory activities

connected therewith, only if such site, project or activity lasts for more than

12 months, andb. an installation or

structure used for the exploration of natural resources, or supervisory

activities connected therewith, or a drilling rig or ship used for the

exploration of natural resources, only if such use or activity lasts for more

than 12 months.1.2.3.4. Notwithstanding the

preceding provisions of this article, the term "permanent

establishment" shall be deemed not to include:a. the use of facilities

solely for the purpose of storage, display or delivery of goods or merchandise

belonging to the enterprise;b. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of storage, display or delivery;c. the maintenance of a

stock of goods or merchandise belonging to the enterprise solely for the

purpose of processing by another enterprise;d. the maintenance of a

fixed place of business solely for the purpose of purchasing goods or

merchandise or of collecting information for the enterprise;e. the maintenance of a

fixed place of business solely for the purpose of carrying on, for the

enterprise, any other activity of a preparatory or auxiliary character; orf. the maintenance of a

fixed place of business solely for any combination of activities mentioned in

sub-paragraphs (a) to (e), provided that the overall activity of the fixed

place of business resulting from this combination is of a preparatory or

auxiliary character.1.2.3.4.5. Notwithstanding the

provisions of paragraphs 1 and 2, where a person--other than an agent of an

independent status to whom paragraph 7 applies--is acting on behalf of an

enterprise of the other Contracting State and has, and habitually exercises, in

a Contracting State an authority to conclude contracts in the name of the

enterprise, that enterprise shall be deemed to have a permanent establishment

in that State in respect of any activities which that person undertakes for the

enterprise, unless the activities of such person are limited to those mentioned

in paragraph 4 which, if exercised through a fixed place of business, would not

make this fixed place of business a permanent establishment under the

provisions of that paragraph.6. Notwithstanding the

preceding provisions of this article, an insurance enterprise of a Contracting

State shall, except in regard to re-insurance, be deemed to have a permanent

establishment in the other Contracting State if it collects premiums in the

territory of that other State or it insures risks situated therein through a

person other than an agent of an independent status to whom paragraph 7

applies.7. An enterprise shall

not be deemed to have a permanent establishment in a Contracting State merely

because it carries on business in that State through a broker, general

commission agent or any other agent of an independent status, provided that

such, persons are acting in the ordinary course of their business. However,

when the activities of such an agent are devoted wholly or almost wholly on

behalf of that enterprise, he will not be considered an agent of an independent

status within the meaning of this paragraph.8. The fact that a

company which is a resident of a Contracting State controls or is controlled by

a company which is a resident of the other Contracting State, or which carries

on business in that other State (whether through a permanent establishment or

otherwise), shall not of itself constitute either company a permanent

establishment of the other.Article

6INCOME

FROM IMMOVABLE PROPERTY1. Income derived by a

resident of a Contracting State from immovable property (including income from

agriculture or forestry) situated in the other Contracting State may also be

taxed in that other State.2. The term

"immovable property" shall have the meaning which it has under the

law of the Contracting State in which the property in question is situated. The

term shall in any case include property accessory to immovable property,

livestock and equipment used in agriculture and forestry, rights to which the

provisions of general law respecting landed property apply, usufruct of immovable

property and rights to variable or fixed payments as consideration for the

working of, or the right to work, mineral deposits, sources and other natural

resources; ships and aircraft shall not be regarded as immovable property.3. The provisions of

paragraph 1 shall apply to income derived from the direct use, letting, or use

in any other form of immovable property.4. The provisions of

paragraphs 1 and 3 shall also apply to the income from immovable property of an

enterprise and to income from immovable property used for the performance of

independent personal services.Article

7BUSINESS

PROFITS1. The profits of an

enterprise of a Contracting State shall be taxable only in that State unless

the enterprise carries on business in the other Contracting State through a

permanent establishment situated therein. If the enterprise carries on business

as aforesaid, the profits of the enterprise may be taxed in the other State but

only so much of them as is attributable to that permanent establishment.2. Subject to the

provisions of paragraph 3, where an enterprise of a Contracting State carries

on or has carried on business in the other Contracting State through a

permanent establishment situated therein, there shall in each Contracting State

be attributed to that permanent establishment the profits which it might be

expected to make if it were a distinct and separate enterprise engaged in the

same or similar activities under the same or similar conditions and dealing

wholly independently with the enterprise of which it is a permanent

establishment.3. In determining the

profits of a permanent establishment, there shall be allowed as deductions

expenses which are incurred for the purposes of the permanent establishment,

including executive and general administrative expenses so incurred, whether in

the State in which the permanent establishment is situated or elsewhere, in

accordance with the provisions of and subject to the limitations of the tax

laws of that State.The

permanent establishment shall not be allowed a deduction for amounts paid to

its head office or any of the other offices of the resident by way of royalties,

fees or other similar payment in return for the use of patents or other rights,

or by way of commission, for specific services performed or for management, or

by way of interest on moneys lent to the permanent establishment.1.2.3.4. 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.5. Where profits include

items of income or capital gains which are dealt with separately in other

articles of this Convention, then the provisions of those articles shall not be

affected by the provisions of this article.6. For the purposes of

the preceding paragraphs, the profits to be attributed to the permanent

establishment shall be determined by the same method year by year unless there

is good and sufficient reason to the contrary.Article

8SHIPPING

AND AIR TRANSPORT1. Profits derived by an

enterprise which is a resident of a Contracting State from the operation of

ships or aircraft in international traffic shall be taxable only in that State,2. Profits derived by a

transportation enterprise which is a resident of a Contracting State from the

use, maintenance, or rental of containers (including trailers and other

equipment for the transport of containers) used for the transport of goods or

merchandise in international traffic shall be taxable only in that Contracting

State unless the containers are used solely within the other Contracting State.3. For the purposes of

this article, interest on funds connected with the operation of ships or

aircraft in international traffic shall be regarded as profits derived from the

operation of such ships or aircraft, and the provisions of Article 11 shall not

apply in relation to such interest. The provisions of this paragraph will,

however, not apply to interest on fixed deposits with a bank.4. The provisions of

paragraph 1 shall also apply to profits from the participation in a pool, a

joint business or an international operating agency.Article

9ASSOCIATED

ENTERPRISESWhere-a. an enterprise of a

Contracting State participates directly or indirectly in the management,

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

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

of a Contracting State and an enterprise of the other Contracting State,and

in 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 would, but for

those conditions, 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

10DIVIDENDS1. Dividends paid by a

company which is a resident of a Contracting State to a resident of the other

Contracting State may be taxed in that other State.2. However, such

dividends may also be taxed in the Contracting State of which the company paying

the dividends is a resident and according to the laws of that State, but if the

recipient is the beneficial owner of the dividends the tax so charged shall not

exceed 10 per cent. of the gross amount of the dividends. This paragraph shall

not affect the taxation of the company in respect of the profits out of which

the dividends are paid.3. The term

"dividends" as used in this article means income from shares or other

rights, not being debt-claims, participating in profits, as well as income from

other corporate rights which is subjected to the same taxation treatment as

income from shares by the laws of the State of which the company making the

distribution is a resident.4. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends,

being a resident of a Contracting State, carries on business in the other

Contracting State of which the company paying the dividends is a resident,

through a permanent establishment situated therein, or performs in that other

State independent personal services from a fixed base situated therein, and the

holding in respect of which the dividends are paid is effectively connected

with such permanent establishment or fixed base. In such case the provisions of

Article 7 or Article 14, as the case may be, shall apply.5. Where a company which

is a resident of a Contracting State derives profits or income from the other

Contracting State, that other State may not impose any tax on the dividends

paid by the company, except in so far as such dividends are paid to a resident

of that other State or in so far as the holding in respect of which the

dividends are paid is effectively connected with a permanent establishment or a

fixed base situated in that other State, nor subject the company's

undistributed profits to a tax on undistributed profits, even if the dividends

paid or the undistributed profits consist wholly or partly of profits or income

arising in such other State.6. Profits of a company

of Contracting State carrying on business in the other Contracting State

through a permanent establishment situated therein may, after having been taxed

under Article 7, be taxed on the remaining amount in the Contracting State in

which the permanent establishment is situated at a rate that does not exceed

the rate set forth in paragraph 2 of this article.Article

11INTEREST1. Interest arising in a

Contracting State and paid to a resident of the other Contracting State may be

taxed in that other State.2. However, such

interest may also be taxed in the Contracting State in which it arises and

according to the laws of that State, but if the recipient and the beneficial

owner of the interest is a resident of the other Contracting State, the tax so

charged shall not exceed' 10 per cent. of the gross amount of the interest. The

competent authorities of the Contracting States shall by mutual agreement

settle the mode of application of this limitation.3. Notwithstanding the

provisions of paragraph 2, interest arising in a Contracting State shall be

exempt from tax in that State provided it is derived and beneficially owned

by:-i.

the

Government, a political sub-division or a local authority of the other

Contracting State; orii.

the

Central Bank of the other Contracting State or any other Governmental bank or

financial institution/agency that may be mutually agreed upon between the two

Contracting States.1.2.3.4. The term

"interest" as used in this article means income from debt-claims of

every kind, whether or not secured by mortgage and whether or not carrying a

right to participate in the debtor's profits, and in particular, income from

government securities and income from bonds or debentures, including premiums

and prizes attaching to such securities, bonds or debentures. Penalty charges

for late payment shall not be regarded as interest for the purpose of this

article.5. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the interest,

being a resident of a Contracting State, carries on business in the other

Contracting State in which the interest arises, through a permanent

establishment situated therein, or performs in that other State independent

personal services from a fixed base situated therein, and the debt-claim in

respect of which the interest is paid is effectively connected with such

permanent establishment or fixed base. In such case the provisions of Article 7

or Article 14, as the case may be, shall apply.6. Interest shall be

deemed to arise in a Contracting State when the payer is that State itself, a

political sub-division, a local authority or a resident of that State. Where,

however, the person paying the interest, 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 indebtedness on which the interest

is paid was incurred and such interest is borne by such permanent establishment

or fixed base, then such interest shall be deemed to arise in the State in

which the permanent establishment or fixed base is situated.7. 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 is 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 only to the

last-mentioned amount. In such a case, the excess part of the payments shall

remain taxable according to the laws of each Contracting State, due regard

being had to the other provisions of this Convention.Article

12ROYALTIES

AND FEES FOR TECHNICAL SERVICES1. Royalties or fees for

technical services arising in a Contracting State and paid to a resident of the

other Contracting State may be taxed in that other State.2. However, such

royalties or fees for technical services may also be taxed in the Contracting

State in which they arise, and according to the laws of that State, but if the

recipient is the beneficial owner of the royalties or fees for technical

services, the tax so charged shall not exceed 10 per cent. of the gross amount

of the royalties or fees for technical services.3.a. The term

"royalties" as used in this article means payments of any kind

received as a consideration for the use of, or the right to use, any copyright

of literary, artistic or scientific work including software, cinematograph

films, any patent, trade mark, design or model, plan, secret formula or

process, or for information concerning industrial, commercial or scientific

experience, and payments for the use of, or the right to use, industrial,

commercial, or scientific equipment;b. the term "fees

for technical services" means payment of any kind in consideration for the

rendering of any managerial, technical or consultancy services including the

provision of services by technical or other personnel but does not include

payments for services mentioned in Articles 14 and 15 of this Convention.1.2.3.4. The provisions of

paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties,

being a resident of a Contracting State, carries on business in the other

Contracting State in which the royalties arise, through a permanent establishment

situated therein, or performs in that other State independent personal services

from a fixed base situated therein, and the right or property in respect of

which the royalties are paid is effectively connected with such permanent

establishment or fixed base. In such a case the provisions of Article 7 or

Article 14, as the case may be, shall apply.5. Royalties and fees

for technical services shall be deemed to arise in a Contracting State when the

payer is that State itself, a political sub-division, a local authority or a

resident of that State. Where, however, the person paying the royalties or fees

for technical services, 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 liability to pay the royalties or fees for technical services

was incurred, and such royalties or fees for technical services are borne by

such permanent establishment or fixed base, then such royalties or fees for

technical services shall be deemed to arise in the State in which the permanent

establishment or fixed base is situated.6. 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 royalties or fees for

technical services, having regard to the use, right or information for which

they are 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 only to the last-mentioned amount. 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 the other

provisions of this Convention.Article

13CAPITAL

GAINS1. Gains derived by a

resident of a Contracting State from the alienation of immovable property

referred to in Article 6 and situated in the other Contracting State may be

taxed in that other State.2. Gains from the

alienation of movable property forming part of the business property of a

permanent establishment which an enterprise of a Contracting State has in the

other Contracting State or of movable property pertaining to a fixed base

available too a resident of a Contracting State in the other Contracting State

for the purpose of performing independent personal services, including such

gains from the alienation of such a permanent establishment (alone or with the

whole enterprise) or of such fixed base, may be taxed in that other State.3. Gains derived by a

resident of Contracting State from the alienation of ships or aircraft operated

in international traffic or movable property pertaining to the operation of

such ships, or aircraft, shall be taxable only in that Contracting State.4. Gains from the 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 State.5. Gains from the

alienation of shares other than those mentioned in paragraph 4 of a company

which is a resident of a Contracting State may be taxed in that State.6. Gains from the

alienation of any property other than that referred to in the preceding

paragraphs shall be taxable only in the Contracting State of which the

alienator is a resident.Article

14INDEPENDENT

PERSONAL SERVICES1. Income derived by a

resident of a Contracting State in respect of professional services or other

activities of an independent character shall be taxable only in that State

except in the following circumstances, when such income may also be taxed in

the other Contracting State:-a. if he has a fixed

base regularly available to him in the other Contracting State for the purpose

of performing his activities; in that case, only so much of the income as is

attributable to that fixed base may be taxed in that other State or;b. if his stay in the

other State is for a period or periods aggregating 183 days or more in any

12-month period commencing or ending in the fiscal year concerned; in that case,

only so much of the income as is derived from his activities performed in that

other State may be taxed in that other State.1.2. The term

"professional services" includes especially independent scientific,

literary, artistic, educational or teaching activities as well as the

independent activities of physicians, lawyers, engineers, architects, surgeons,

dentists and accountants.2.Article 15DEPENDENT

PERSONAL SERVICES1. Subject to the

provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration

derived by a resident of a Contracting State in respect of an employment shall

be taxable only in that State unless the employment is exercised in the other

Contracting State. If the employment is so exercised, such remuneration as is

derived therefrom may be taxed in that other State.2. Notwithstanding the

provisions of paragraph 1, remuneration derived by a resident of a Contracting

State in respect of an employment exercised in the other Contracting State

shall be taxable only in the first-mentioned State if:-a. the recipient is

present in the other State for a period or periods not exceeding in the

aggregate 183 days in any 12-month period commencing or ending in the fiscal

year concerned, andb. the remuneration is

paid by, or on behalf of, an employer who is not a resident of the other State,

andc. the remuneration is

not borne by a permanent establishment or a fixed base which the employer has

in the other State.3. Notwithstanding the

preceding provisions of this article, remuneration derived in respect of an

employment exercised aboard a ship or aircraft operated in international

traffic, may be taxed in the Contracting State in which the enterprise

operating the ship or aircraft is a resident.Article

16DIRECTORS'

FEESDirectors'

fees and other similar payments derived by a resident of a Contracting State in

his capacity as a member of the board of directors or a similar body of a

company which is a resident of the other Contracting State may also be taxed in

that other State.Article

17ARTISTES

AND SPORTSPERSONS1. Notwithstanding the

provisions of Articles 14 and 15, the income derived by a resident of a

Contracting State as an entertainer, such as a theatre, motion picture, radio

or television artiste, or a musician, or as a sportsperson, from his personal

activities as such exercised in the other Contracting State, may be taxed in

that other State.2. Where income in

respect of personal activities exercised by an entertainer or a sportsperson in

his capacity as such accrues not to the entertainer or sportsperson himself but

to another person, that income may, notwithstanding the provisions of Articles

7, 14 and 15, be taxed in the Contracting State in which the activities of the

entertainer or sportsperson are exercised.3. The provisions of

paragraphs 1 and 2, shall not apply to income from activities performed in a

Contracting State by entertainers or sportspersons if the visit to that State

is substantially supported by public funds of one or both of the Contracting

States or of political sub-divisions or local authorities thereof. In such a

case, the income is taxable only in the Contracting State of which the

entertainer or sportsperson is a resident.Article

18PENSIONS

AND OTHER PAYMENTS1. Subject to the

provisions of paragraph 2 of Article 19, pensions and other similar

remuneration paid to a resident of a Contracting State in consideration of past

employment and any annuity paid to such a resident shall be taxable only in

that State.2. The term

"annuity" means a stated sum payable to an individual periodically at

stated times during his 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.Article

19GOVERNMENT

SERVICE1.a. Salaries, wages and

other similar remuneration, other than a pension, paid by a Contracting State

or a political sub-division or a local authority thereof to an individual in

respect of services rendered to that State or sub-division or authority shall

be taxable only in that State.b. However, such

salaries, wages and other similar remuneration shall be taxable only in the

other Contracting State if the services are rendered in that State and the

individual is a resident of that State who:-i.

is

a national of that State; orii.

did

not become a resident of that State solely for the purpose of rendering the

services.1.2.a. 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 State or sub-division or authority shall be taxable only in that State.b. However, such pension

shall be taxable only in the other Contracting State if the individual is a

resident of, and a national of, that State.1.2.3. The provisions of Articles

15, 16 and 18 shall apply to salaries, wages and other similar remuneration and

to pensions, in respect of services rendered in connection with a business

carried on by a Contracting State or a political sub-division or a local

authority thereof.Article

20STUDENTS

AND APPRENTICES1. A student or business

apprentice who is or was a resident of a Contracting State immediately before

visiting the other Contracting State and who is present in that other

Contracting State solely for the purpose of his education or training shall,

besides grants, loans and scholarships, be exempt from tax in that other State

on:-a. payments made to him

by persons residing outside that other State for the purposes of his

maintenance, education or training; andb. remuneration from

employment in that other State for an amount not exceeding the amount which is

exempt from tax under the laws of that other Contracting State for any fiscal

year,as the case may be, provided that such employment is directly related to his

studies or is undertaken for the purpose of his maintenance.1.2. The benefit of this

article shall extend only for such period of time as may be reasonably or

customarily required to complete the education or training undertaken, but in

no event shall any individual have the benefit of this article for more than

seven consecutive years from the date of his first arrival in that other

Contracting State.Article

21PROFESSORS,

TEACHERS AND RESEARCH SCHOLARS1. A professor or

teacher who is or was a resident of a Contracting State 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 exempt from tax in that

other 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 State.2. 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.3. For the purposes of

this article and Article 20, an individual shall be deemed to be a resident of

a Contracting State if he is resident in that State in the fiscal year in which

he visits the other Contracting State or in the immediately preceding fiscal

year.4. For the purposes of

paragraph 1 "approved institution" means an institution which has

been approved in this regard by the competent authority of the concerned State.Article

22OTHER

INCOME1. Items of income of a

resident of a Contracting State, wherever arising, not dealt with in the

foregoing articles of this Convention shall be taxable only in that State.2. The provisions of

paragraph I 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 establishment situated therein, or

performs in that other 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.

In such case the provisions of Article 7 or Article 14, as the case may be,

shall apply.3. Notwithstanding the

provisions of paragraph 1, if a resident of a Contracting State derives income

from sources within the other Contracting State in the form of lotteries,

crossword puzzles, races including horse races, card games and other games or

any sort of gambling or betting of any form or nature whatsoever, such income

may be taxed in the other Contracting State.Article

23CAPITAL1. Capital represented

by immovable property referred to in Article 6, owned by a resident of a

Contracting State and situated in the other Contracting State may be taxed in

that other State.2. Capital represented.

by movable property forming part of the business property of a permanent establishment

which an enterprise of a Contracting State has in the other Contracting State

or by movable property pertaining to a fixed base available to a resident of a

Contracting State in the other Contracting State for the purpose of performing

independent personal services, may also be taxed in that other State.3. Capital represented

by ships and aircraft operated in international traffic, and by movable

property pertaining to the operation of such ships or aircraft, shall be

taxable only in that Contracting State in which the enterprise operating such

ships or aircraft is a resident.Article

24ELIMINATION

OF DOUBLE TAXATION1. The law in force in

either of the Contracting States will continue to govern the taxation of income

in the respective Contracting States except where provisions to the contrary

are made in this Convention.2. In the case of

Kazakstan, double taxation shall be avoided as follows:-a. Where a resident of

Kazakstan derives income or owns capital which, in accordance with the

provisions of this Convention, may be taxed in India, Kazakstan shall allow:-i.

as

a deduction from the tax on the income of that resident, an amount equal to the

income-tax paid in India;ii.

as

a deduction from the tax on capital of that resident, an amount equal to the

tax on capital paid in India.The

amount of the tax to be deducted pursuant to the above provision shall not

exceed the tax which would have been charged on the same income in Kazakstan

under the rates applicable thereon.1.2.3. In the case of India,

double taxation shall be avoided as follows:-a. Where a resident of

India derives income or owns capital which, in accordance with the provisions

of this Convention, may be taxed in Kazakstan, India shall allow:-i.

as

a deduction from the tax on the income of that resident, an amount equal to the

income-tax paid in Kazakstan;ii.

as

a deduction from the tax on capital of that resident, an amount equal to the

tax on capital paid in Kazakstan.The

amount of the tax to be deducted pursuant to the above provision shall not

exceed the tax which would have been charged on the same income in India under

the rates applicable thereon.1.2.3.4. Income or capital

which, in accordance with the provisions of this Convention, is not to be

subjected to tax in a Contracting State may be taken into account for

calculating the rate of tax to be imposed in that Contracting State.5. The tax paid in a

Contracting State shall be deemed to include the tax which would have been paid

but for any exemption or reduction of tax granted under incentive provisions

contained in the law of that Contracting State designed to promote economic

development to the extent that such exemption or reduction is granted for

profits from industrial or manufacturing activities or from agriculture,

fishing or tourism (including restaurants and hotels) provided that the

activities have been carried out within that Contracting State.Article

25NON-DISCRIMINATION1. Nationals of a

Contracting State shall not be subjected in the other Contracting State to any

taxation or any requirement connected therewith, which is other or more

burdensome than the taxation and connected requirements to which nationals of

that other State in the same circumstances, are or may be subjected. This

provision shall, notwithstanding the provisions of Article 1, also apply to

persons who are not residents of one or both the Contracting States.2. The taxation on a

permanent establishment which an enterprise of a Contracting State has in the

other Contracting State shall not be less favourably levied in that other State

than the taxation levied on enterprises of that other State carrying on the same

activities. This provision shall not be construed as preventing a Contracting

State from charging the profits of a permanent establishment which a company of

the other Contracting State has in the first-mentioned State at a rate of tax

which is higher than that imposed on the profits of a similar company of the

first-mentioned Contracting State, nor as being in conflict with the provisions

of paragraph 3 of Article 7 of this Convention.3. Enterprises of a

Contracting State, the capital of which is wholly or partly owned or

controlled, directly or indirectly, by one or more residents of the other

Contracting State, shall not be subjected in the first-mentioned State to any

taxation or any requirement connected therewith which is other or more

burdensome than the taxation and connected requirements to which other similar

enterprises of the first-mentioned State are or may be subjected.4. Except where the

provisions of Article 9, paragraph 7 of Article 11, or paragraph 6 of Article

12 apply, interest, royalties and other disbursements paid by an enterprise of

a Contracting State to a resident of the other Contracting State shall, for the

purpose of determining the taxable profits of such enterprise, be deductible

under the same conditions as if they had been paid to a resident of the

first-mentioned State. Similarly, any debts of an enterprise of a Contracting

State to a resident of the other Contracting State shall, for the purpose of

determining the taxable capital of such enterprise, be deductible under the

same conditions as if they had been contracted to a resident of the

first-mentioned State.5. The provisions of

this article shall, notwithstanding the provisions of Article 2, apply to taxes

of every kind and description.Article

26MUTUAL

AGREEMENT PROCEDURE1. Where a person

considers that the actions of one or both of the Contracting States result or

will result for him in taxation not in accordance with the provisions of this

Convention, he may, Irrespective of the remedies provided by the domestic law

of those States, present his case to the competent authority of the Contracting

State of which he is a resident or, if his case comes under paragraph 1 of

Article 25, to that of the Contracting State of which he is a national. The

case must be presented within three years from the first notification of the

action resulting in taxation not in accordance with the provisions of the

Convention.2. The competent

authority shall endeavour, if the objection appears to it to be justified and

if it is not itself able to arrive at a satisfactory solution, to resolve the

case by mutual agreement with the competent authority of the other Contracting

State, with a view to the avoidance of taxation which is not in accordance with

the Convention. Any agreement reached shall be implemented notwithstanding any

time limits in the domestic law of the Contracting State.3. The competent

authorities of the Contracting States shall endeavour to resolve by mutual

agreement any difficulties or doubts arising as to the interpretation or

application of the Convention. They may also consult together for the

elimination of double taxation in cases not provided for in the Convention.4. The competent

authorities of the Contracting States may communicate with each other directly

for the purpose of reaching an agreement in the sense of the preceding

paragraphs. When it seems advisable in order to reach agreement to have an oral

exchange of opinions, such exchange may take place through a Commission

consisting of representatives of the competent authorities of the Contracting

States.Article

27EXCHANGE

OF INFORMATION1. The competent

authorities of the Contracting States shall exchange such information

(including documents) as is necessary for carrying out the provisions of this

Convention or of the domestic laws of the Contracting State concerning taxes

covered by the Convention, in so far as the taxation thereunder is not contrary

to the Convention in particular for the prevention of fraud or evasion of such

taxes. The exchange of information is not restricted by Article 1. Any

information received by a Contracting State shall be treated as secret in the

same manner as information obtained under the domestic laws of that State and

shall be disclosed only to persons or authorities (including courts and

administrative bodies) involved in the assessment or collection of, the

enforcement or prosecution in respect of, or the determination of appeals in

relation to, the taxes covered by the Convention. Such persons or authorities

shall use the information only for such purposes. They may disclose the

information in public court proceedings or in judicial decisions.2. In no case shall the

provisions of paragraph 1 be construed so as to impose on a Contracting State

the obligation:-a. to carry out

administrative measures at variance with the laws or administrative practice of

that or of the other Contracting State;b. to supply information

or documents which is not obtainable under the laws or in the normal course of

the administration of that or of the other Contracting State;c. to supply information

which would disclose any trade, business, industrial, commercial or

professional secret or trade process, or information, the disclosure of which

would be contrary to public policy (ordre public).Article

28ASSISTANCE

IN COLLECTION1. The Contracting

States undertake to lend assistance to each other in the collection of taxes to

which this Convention relates together with interest, costs, and civil

penalties relating to such taxes, referred to in this article as a

"revenue claim".2. Request for

assistance by the competent authority of a Contracting State in the collection

of a revenue claim shall include a certification by such authority that, under

the laws of that State, the revenue claim has been finally determined. For the

purposes of this article, a revenue claim is finally determined when a

Contracting State has the right under its internal law to collect the revenue

claim and the taxpayer has no further rights to restrain collection.3. Amounts collected by

the competent authority of a Contracting State pursuant to this article shall

be forwarded to the competent authority of the other Contracting State.

However, the first-mentioned Contracting State shall be entitled to

reimbursement of costs, if any, incurred in the course of rendering such

assistance to the extent mutually agreed between the competent authorities of

the two States.4. Nothing in this

article shall be construed as imposing on either Contracting State the

obligation to carry out administrative measures of a different nature from

those which are used in the collection of its own taxes or those which would be

contrary to its public policy (ordre public).Article

29MEMBERS

OF DIPLOMATIC MISSIONS AND CONSULAR POSTSNothing

in this Convention shall affect the fiscal privileges of members of diplomatic

missions or consular posts under the general rules of international law or

under the provisions of special agreements.Article

30ENTRY

INTO FORCE1. The Contracting

States shall notify each other in writing through diplomatic channels, the

completion of the procedure required by the respective laws for the entry into

force of this Convention. This Convention shall enter into force thirty days

after the receipt of the latter of the notifications.2. The provisions of

this Convention shall have effect:-a. in India, in respect

of income derived or capital held in any fiscal year beginning on or after the

first day of April next following the calendar year in which the Convention

enters into force; andb. in Kazakstan in

respect of income derived or capital held in any fiscal year beginning on or

after the first day of January next following the calendar year in which the

Convention enters into force.Article

31TERMINATIONThis

Convention shall remain in force indefinitely until terminated by one of the

Contracting States. Either Contracting State may terminate the Convention,

through diplomatic channels, by giving notice of termination at least six

months before the end of any calendar year after the expiry of five years from

the date of entry into force of the Convention. In such event, the Convention

shall cease to have effect:-a. in India, in respect

of income arising in any previous year on or after the first day of April next

following the calendar year in which the notice is given and in respect of

capital which is held at the expiry of any previous year beginning on or after

the first day of April next following the calendar year in which the notice of

termination is given; andb. in Kazakstan, in

respect of income arising in any fiscal year on or after the first day of

January next following the calendar year in which the notice is given and in

respect of capital which is held at the expiry of any fiscal year beginning on

or after the first day of January next following the calendar year in which the

notice of termination is given.In

witness whereof, the undersigned, being duly authorized thereto, have signed

this Convention.Done

in duplicate at New Delhi, this 9th day of December, 1996, in the Hindi, Kazak,

Russian and English languages, all texts being equally authentic. In case of

divergence between the texts, the English text shall prevail.Sd.)

(P. Chidambaram) (Sd.) (A. Esimov)For

the Government of the For the Government of theRepublic

of India