Morocco - Legal Draft

NOTIFICATION

UNDER SECTION 90: CONVENTION BETWEEN THE GOVERNMENT OF THE REPUBLIC OF INDIA

AND THE GOVERNMENT OF THE KINGDOM OF MOROCCO FOR THE AVOIDANCE OF DOUBLE

TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOMENotification

No. G. S. R. 245(E), dated 15th March, 2000.Whereas

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

Government of the Kingdom of Morocco for the avoidance of double taxation and

the prevention of fiscal evasion with respect to taxes on income, has come into

force on the 20th day of February, 2000, on the notification by both the

Contracting States to each other, under Article 29 of the said Convention of

the completion of the procedures required by their respective laws for the

bringing into force of the said Convention;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 Convention shall be given effect to in the Union of

India.ANNEXURECONVENTION

BETWEEN THE REPUBLIC OF INDIA AND THE KINGDOM OF MOROCCO FOR THE AVOIDANCE OF

DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON

INCOMETHE

GOVERNMENT OF THE REPUBLIC OF INDIA AND THE GOVERNMENT OF THE KINGDOM OF

MOROCCODESIRING

to conclude a Convention for the avoidance of double taxation and the

prevention of fiscal evasion with respect to taxes on incomeHAVE

agreed as follows:Article

1 SCOPE OF THE CONVENTIONThis

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

Contracting States.Article

2 TAXES COVERED1. This Convention shall

apply to taxes on income 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 all taxes imposed on total income or on elements of

income, including taxes on gains from the alienation of movable or immovable

property.3. The existing taxes to

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

India; the income-tax, including any surcharge thereon; (hereinafter referred

to as "Indian tax").b. in the Kingdom of

Morocco; (i) general income-tax; (ii) corporation tax; (iii) the tax on income

from the shares or social parts and assimilated income; (iv) the tax on

immovable property profits; (v) the participation on the national solidarity;

(vi) the tax on income from fixed yield investments; (hereinafter referred to

as "Moroccan tax")1.2.3.4. The Convention shall

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

either Contracting State after the date of signature of the present Convention

in addition to, or in place of, the taxes referred to in paragraph 3. The

competent authorities of the Contracting States shall notify each other of any

substantial changes which are made in their respective taxation laws.Article

3 GENERAL DEFINITIONS1. In this Convention,

unless the context otherwise requires:a. the term

"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 jurisdictions, according to the Indian law

and in accordance with international law, and in particular, the U. N.

Convention on the Law of the Sea;b. the term

"Morocco" means the Kingdom of Morocco; and when used in geographical

sense the term "Morocco" includes:i.

the

territory of the Kingdom of Morocco; the territorial sea thereof andii.

the

maritime areas beyond the territorial sea, including the sea bed and subsoil

thereof (continental shelf) and the exclusive economic zone over which Morocco

exercises sovereign rights, in accordance with its domestic laws and

international law, for the purpose of exploration and exploitation of the

natural resources of such areas.a.b.c. the term "a

Contracting State" and "the other Contracting State" mean India

or Morocco, as the context requires;d. the term

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

a company or body corporate under the taxation laws in force in the respective

Contracting States;e. the term

"competent authority" meansi.

in

the case of India, the Central Government in the Ministry of Finance,

Department of Revenue or their authorised representativeii.

in

the case of Morocco, the Minister of Finance or his authorised representative;a.b.c.d.e.f. 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;g. the term "fiscal

year" meansi.

in

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

Income-tax Act, 1961.ii.

in

the case of Morocco, a "fiscal exercise" as defined under the laws

relating to the General Income Tax and the Corporation Tax.a.b.c.d.e.f.g.h. 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;i. the term

"national" means any individual possessing the nationality of a

Contracting State and any legal person, partnership or association deriving its

status from the laws in force in a Contracting State;j. the term

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

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

force in the respective Contracting States;k. the term

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

shall not include any amount other than tax 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 or fine imposed relating to those taxes.1.2. As regards the

application of this Convention by a Contracting State, any term not defined

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

has under the law of that State concerning the taxes to which this Convention

applies.Article

4 RESIDENT1. For the purposes of

this Convention, the term "resident of a Contracting State" means any

person who, under the laws of that State or any political sub-division or local

authority thereof is liable to tax therein by reason of his domicile,

residence, place of management or any other criterion of a similar nature. This

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

in respect only of income from sources in that State.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 only 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 only of the State in which he has an habitual abode;c. (el if he has an

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

resident only 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 only of

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

5 PERMANENT 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 especiallya. 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; (i) a farm, plantation or other place where agriculture,

forestry, plantation or related activities are carried on; and (j) a building

site or construction or assembly project or supervisory activities in

connection therewith, but only where such site, project or activity continues

for a period of more than eight months.1.2.3. An enterprise shall

be deemed to have a permanent establishment in a Contracting State and to carry

on business through that permanent establishment if it provides services or

facilities in connection with, or supplies plant and machinery on hire used for

or to be used in the prospecting for, or extraction or exploitation of mineral

oils in that State.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 or business solely for the purpose of carrying on, for the

enterprise, any other activity of a preparatory or auxiliary character.f. 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 and has habitually exercises, in a Contracting State an authority to

conclude contracts on behalf of the enterprise that enterprise shall be deemed

to have a permanent establishment in that State in respect of any activities

which that person under takes for the enterprise, unless the activities of such

person are limited to those mentioned in paragraph 4 of this article, 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 insures risks situated therein through a

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

applies.7. An enterprise of a

Contracting State shall not be deemed to have a permanent establishment in the

other Contracting State merely because it carries on business in that other

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 Contracting State (whether through a permanent

establishment or otherwise), shall not of itself constitute either company a

permanent establishment of the other.Article

6 INCOME 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 be taxed

in that other State.2. The term

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

laws 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, boats 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

7 BUSINESS 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 of permanent

establishment.For

the purposes of this article, where a permanent establishment takes an active

part in negotiating, concluding or fulfilling contracts entered into by the

enterprise, then notwithstanding that other parts of the enterprise have also

participated in those transactions, there shall be attributed to the permanent

establishment that proportion of profits of the enterprise arising out of those

contracts as the contribution of the permanent establishment to those

transactions bears to that of the enterprise as a whole.1.2. Subject to the

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

on business in the other Contracting State through a permanent establishshment

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 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 business 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 the tax laws, and subject to

the limitations laid down therein.4. In so far as it has

been customary in a Contracting State to determine the profits to be attributed

to a permanent establishment on the basis of an apportionment of the total

profits of the enterprise to its various parts, nothing in paragraph 2 shall

preclude that Contracting State from determining the profits to be taxed by

such an apportionment as may be customary. The method of apportionment adopted

shall, however, be such that the result shall be in accordance with the

principles contained in the article.5. 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.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.7. Where profits include

items of income 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.Article

8 SHIPPING AND AIR TRANSPORT1. Profits derived by an

enterprise 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 directly connected with the operation of ships

or aircraft in international traffic shall be regarded as profits described in

this article, and the provisions of article 11 (interest) shall not apply in

relation to such interest.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

9 ASSOCIATED ENTERPRISES1. Where: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.1.2. Where a Contracting

State includes in the profits of an enterprise of that State-and taxes

accordingly-profits on which an enterprise of the other Contracting State has

been charged to tax in that other State and the profits so included are profits

which would have accrued to the enterprise of the first mentioned State if the

conditions made between the two enterprises had been those which would have

been made between independent enterprises, then that other State shall make

appropriate adjustment to the amount of the tax charged therein on those

profits. In determining such adjustment, due regard shall be had to the other

provisions of this Convention and the competent authorities of the Contracting

States shall, if necessary, consult each other.Article

10 DIVIDENDS1. 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 Contracting 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

Contracting 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 the company's undistributed profits, even if the dividends

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

arising in such other State.Article

11 INTEREST1. Interest arising in a

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

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

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

according to the laws of that Contracting State; but if the recipient is the

beneficial owner of the interest, the tax so charged shall not exceed 10 per

cent. of the gross amount of the interest.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; or (ii) in the case of India, the Reserve Bank of India, the

Industrial Finance Corporation of India, the Industrial Development Bank of India,

the Export Import Bank of India, the National Housing Bank, the Small

Industries Development Bank of India and the Industrial Credit and Investment

Corporation of India (ICICI); and (iii) in the case of Morocco, the Bank

Al-Maghrib (the Central Bank of Morocco), the Northern Provinces Development

Agency, the Central Popular Bank and its regional agencies, the National Bank

of Economic Development, the Moroccan Bank of Foreign Trade, the Communal

Equipment Fund, the Immovable and Hotel Credit and the Industrial Development

Office. (iv) any other institution as may be agreed from time to time between

the competent authorities of the Contracting States.1.2.3.4. The term

"interest" as used in this article means income from debtclaims 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 Contracting 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 fixedbase. 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 Contracting State

itself, a political sub-division, a local authority or a resident of that

Contracting 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 Contracting 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 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

12 ROYALTIES AND FEES FOR TECHNICAL SERVICES1. Royalties and 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 Contracting 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 the 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. The term

"royalties" as used in this article meansa. payments of any kind

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

of a literary, artistic or scientific work including cinematograph films or

recordings on any means of reproduction for use for radio or television

broadcasting, any patent, trade mark, design or model, plan, computer software

programme, secret formula or process, or for information concerning industrial,

commercial or scientific experience; andb. payments of any kind

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

commercial or scientific equipment.1.2.3.4. The term "fees

for technical services" means payments of any kind in consideration for

the rendering of 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.5. The provisions of

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

fees for technical services being a resident of a Contracting State, carries on

business in the other Contracting State, in which the royalties or fees for

technical services arise, through a permanent establishment 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 royalties or fees for technical services 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.6. Royalties or 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 Contracting 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

Contracting 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 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 or between both of them and some other person,

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

13 CAPITAL 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 also

be taxed in that other Contracting 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 to 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 Contracting

State.3. Gains 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 the Contracting State in which the place of effective

management of the enterprise is situated.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 also be taxed in that Contracting State.5. Gains from the

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

which is a resident of a Contracting State may be taxed in that Contracting

State.6. Gains from the

alienation of any property other than that mentioned in paragraphs 1, 2, 3, 4

and 5, shall be taxable only in the Contracting State of which the alienator is

a resident.Article

14 INDEPENDENT PERSONAL SERVICES1. Notwithstanding the

provisions of article 12 relating to fees for technical services, income

derived by a resident of a Contracting State in respect of professional

services or other independent activities of a similar character shall be

taxable only in that Contracting State except in the following circumstances:a. if he has a fixed

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

of performing his activities; orb. if his stay in the

other Contracting State is for a period or periods amounting to or exceeding in

the aggregate 183 days in the relevant fiscal year;in

such case, only so much of the income as is attributable to that fixed base or

as is derived from his activities performed in that other Contracting State, as

the case may be, may also be taxed in that other Contracting State.1.2. The term

"professional services" includes independent scientific, literary,

artistic, educational or teaching activities as well as the independent

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

and accountants.Article

15 DEPENDENT PERSONAL SERVICES1. Subject to the

provisions of articles 16, 17, 18, 19, 20 and 21, 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

provision; 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 the relevant fiscal year; 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.1.2.3. Notwithstanding the

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

employment exercised aboard a ship or aircraft operated in international

traffic, by an enterprise of a Contracting State shall be taxable only in that

State.Article

16 DIRECTORS' 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 of a company which is a

resident of the other Contracting State may be taxed in that other Contracting

State.Article

17 INCOME EARNED BY ARTISTES AND SPORTSPERSONS1. Notwithstanding the

provisions of articles 14 and 15, income derived by a resident of a Contracting

State as an artiste, 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 artiste or a sportsperson in his

capacity as such accrues not to the artiste 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

artiste 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 wholly or 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

18 REMUNERATION AND PENSIONS IN RESPECT OF GOVERNMENT SERVICE1.a. 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

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 other State.1.2.3. The provisions of

articles 15, 16 and 19 shall apply to remuneration and 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

19 NON-GOVERNMENT PENSIONS AND ANNUITIES1. Any pension, other

than a pension referred to in article 18, or any annuity derived by a resident

of a Contracting State from sources within the other Contracting State may be

taxed only in the first- mentioned Contracting State.2. The term

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

services.3. The term

"annuity" means a stated sum payable periodically at stated times

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.Article

20 PAYMENTS RECEIVED BY STUDENTS AND APPRENTICES1. A student or business

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

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

solely for the purpose of his education or training shall 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 in an amount not exceeding the equivalent of US

dollars 2000, during any fiscal year: 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 reasonable or

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

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

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

Contracting State.Article

21 PAYMENTS RECEIVED BY PROFESSORS, TEACHERS AND RESEARCH SCHOLARS1. A professor or

teacher or 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 institution, approved 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 the Contracting 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" means a university, college, school or other

institution which has been approved in this regard by the competent authority

of the concerned Contracting State.Article

22 OTHER INCOME1. Subject to the

provisions of paragraph 2, items of income of a resident of a Contracting

State, wherever arising, which are not expressly dealt with in the foregoing

articles of this Convention, shall be taxable only in that Contracting State.2. 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 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 of

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

may be taxed in the other Contracting State.Article

23 AVOIDANCE OF DOUBLE TAXATION1. The laws 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 India,

double taxation shall be eliminated as follows:Where

a resident of India derives income which, in accordance with the provisions of

this Convention, may be taxed in Morocco, India shall allow as a deduction from

the tax on the income of that resident an amount equal to the income-tax paid

in Morocco, whether directly or by deduction at source. Such amount shall not,

however, exceed that part of the income-tax, as computed before the deduction

is given, which is attributable to the income which may be taxed in Morocco.1.2.3. In the case of

Morocco, double taxation shall be eliminated as followsWhere

a resident of Morocco derives income which, in accordance with the provisions

of this Convention may be taxed in India, Morocco shall allow as a deduction

from the tax on the income of that resident an amount equal to the income-tax

paid in India, whether directly or by deduction at source. Such deduction shall

not, however, exceed that part of the income-tax as computed before the

deduction is given, which is attributable to the income which may be taxed in

India.1.2.3.4. The tax payable in a

Contracting State mentioned in paragraphs 2 and 3 of this article shall be

deemed to include the tax which would have been payable but for the tax

incentives granted under the laws of the Contracting State and which are

designed to promote economic development.5. Income 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.Article

24 NON-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.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 in the same circumstances. This provision shall not be

construed as preventing a Contracting State from charging the profits of a

permanent establishment which an enterprise of the other Contracting State has

in the first-mentioned State at a rate higher than that imposed on the profits

of a similar enterprise of the first-mentioned Contracting State, nor as being

in conflict with the provisions of paragraph 3 of article 7 of this Convention.3. Nothing contains in

this article shall be construed as obliging a Contracting State to grant to

persons not residents in that State any personal allowances, reliefs,

reductions and deductions for taxation purposes which are by law available only

to persons who are so resident.4. 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 in the same

circumstances.5. In this article, the

term "taxation" means taxes which are the subject of this Convention.Article

25 MUTUAL AGREEMENT PROCEDURE1. Where a resident of a

Contracting State considers that the actions of one or both of the Contracting

States result or will result for him in taxation not in accordance with this

Convention, he may, notwithstanding the remedies provided by the national laws

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

State of which he is a resident. This case must be presented within three years

of the date of receipt of notice of the action which gives rise to taxation not

in accordance with this 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 an appropriate 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 not in accordance with the Convention.

Any agreement reached shall be implemented notwithstanding any time limits in

the national laws of the Contracting States.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 this Convention. They may also consult together for the

elimination of double taxation in cases not provided for in this 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

State.Article

26 EXCHANGE 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 States concerning taxes

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

to this 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, The competent

authorities shall, through consultation, develop appropriate conditions,

methods and techniques concerning the matters in respect of which such exchange

of information shall be made, including where appropriate, exchange of

information regarding tax avoidance.2. The exchange of

information or documents shall be either on routine basis or on request with

reference to particular cases or both. The competent authorities of the

Contracting States shall agree from time to time on the list of information or

documents which shall be furnished on a routine basis.3. 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 and administrative practice

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

or documents which are 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

or documents 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.Article

27 COLLECTION ASSISTANCE1. 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 used in the collection of its own taxes or those which would be contrary

to its public policy.Article

28 DIPLOMATIC AND CONSULAR ACTIVITIESNothing

in this Convention shall affect the fiscal privileges of diplomatic and

consular officials under the general rules of international law or under the

provisions of special agreements.Article

29 ENTRY INTO FORCE1. The Contracting

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

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

force of this Convention.2. This Convention shall

enter into force 30 days after the receipt of the later of the notifications

referred to in paragraph 1 of this article.3. The provisions of

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

of income arising 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.b. in Morocco, in

respect of income arising on or after the first day of January of the calendar

year next following the year in which this Convention enters into force.Article

30 TERMINATIONThis

Convention shall remain in force indefinitely until terminated by a Contracting

State. Either Contracting State may terminate this Convention, through

diplomatic channels, by giving notice of termination at least six months before

the end of any calendar year beginning after the expiration 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 fiscal year on or after the first day of April next

following the calendar year in which the notice of termination is given;b. in Morocco, in

respect of income arising on or after the first day of January of the calendar

year next following the year in which the notice of termination is given.IN

WITNESS WHEREOF the undersigned, being duly authorised thereto, have signed the

present Convention.DONE

in duplicate at Rabat, this 30th day of October, 1998, in Hindi, Arabic;

English and French languages, the four texts being equally authentic. In case

of divergence of interpretation, the English text shall prevail.For

the Republic of India.....................................(K.

M. R. Janarthanan)For

the Kingdom of Morocco............................................(Fathallah

Oualalou)[Notification

No. 11273/F. No. 503/9/91-FTD ]