Namibia - Legal Draft

AGREEMENT BETWEEN

INDIA AND NAMIBIA.Agreement

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

Republic of Namibia for the avoidance of double taxation and prevention of

fiscal evasion with respect to taxes on income and capital gainsNotification

No. G. S. R. 196(E), dated 8th March, 1999.Whereas

the convention stated in the Schedule below, between the Government of the

Republic of India and the Government of the Republic of Namibia for the

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

to taxes on income and capital gains has entered into force on the 22nd

January, 1999, on the notifications by both the Contracting States to each

other of the completion of the procedures as required by Article 29 of the said

Convention:Now,

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

Act, 1961 (45 of 1961), the Central Government hereby directs that all the

provisions of the Convention stated in the Schedule shall be given effect to in

the Union of India.SCHEDULECONVENTION

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

REPUBLIC OF NAMIBIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF

FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINSThe

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

Namibia, desiring to conclude a Convention for the avoidance of double taxation

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

capital gains, 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. The taxes to which

this Convention shall apply are:a. in Namibia:i.

the

income-tax;ii.

the

non-resident shareholders' tax; andiii.

the

petroleum income-tax; (hereinafter referred to as "Namibian tax");a.b. in India:income-tax

(including any surcharge thereon). (hereinafter referred to as "Indian

tax").1.2. This 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 referred to in paragraph 1. The competent authorities of the

Contracting States shall notify each other of any substantial changes which

have been made in their respective taxation laws, and if it seems desirable to

amend any article of this Convention without affecting the general principles

thereof, the necessary amendments may be made by mutual consent.Article

3GENERAL

DEFINITIONS1. For the purposes of

this Convention, unless the context otherwise requires:a. the term

"Namibia" means the Republic of Namibia and when used in a

geographical sense, includes the territorial sea as well as the exclusive

economic zone and the continental shelf, over which Namibia exercises sovereign

rights in accordance with its internal law and subject to international law,

concerning the exploration and exploitation of the natural resources of the

sea-bed and its sub-soil and the superjacent waters;b. the term

"India" means the territory of India and includes 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 UN Convention on the

Law of the Sea, 1982;c. the terms "a

Contracting State", and "the other Contracting State" means

Namibia or India, as the context requires;d. 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;e. the term

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

a body corporate for tax purposes;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

"international traffic" means any transport by ship or aircraft

operated by an enterprise which has its place of effective management in a

Contracting State, except when the ship or aircraft is operated solely between

places in the other Contracting State;h. the term

"national" means:i.

any

individual possessing the citizenship of a Contracting State;ii.

any

legal person, partnership and association deriving its status as such from the

law in force in a Contracting State;a.b.c.d.e.f.g.h.i. the term

"competent authority" means:i.

in

the case of Namibia, the Permanent Secretary in the Ministry of Finance who is

the Chief Executive Officer and Administrator of Namibian Tax Laws or his or

her authorised representative;ii.

in

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

(Department of Revenue) or its authorised representative;a.b.c.d.e.f.g.h.i.j. the term

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

shall not include any interest or 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 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

4Resident1. For the purposes of

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

individual who is ordinarily resident, or has his or her domicile in that State

and any company or other body of persons which has its place of effective management

or incorporation in that State.2. Where by reason of

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

States, then his or her status shall be determined as follows:a. he or she shall be

deemed to be a resident of the State in which he or she has a permanent home

available to him or her; if he or she has a permanent home available to him or

her in both States, he or she shall be deemed to be a resident of the State

with which his or her personal and economic relations are closer (centre of

vital interests);b. if the State in which

he or she has his or her centre of vital interests cannot be determined, or if

he or she has not a permanent home available to him or her in either State, he

or she shall be deemed to be a resident of the State in which he or she has a

habitual abode;c. if he or she has a

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

to be a resident of the State of which he or she is a national;d. if he or she 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. In case of doubt

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. an installation or

structure used for the exploration of natural resources, provided that the

installation or structure continues for a period of not less than six months;h. a warehouse, in

relation to a person providing storage facilities for others; andi. in the case of

Namibia, a guest farm or other operation of a similar nature;1.2.3. The term

"permanent establishment" likewise encompasses:a. a building site, a

construction, assembly or installation project or supervisory activities in

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

for a period of more than six months; orb. the furnishing of

services, excluding those referred to in Article 14, by an enterprise of a

Contracting State through employees or other personnel engaged in the other

Contracting State, provided that such activities continue for the same project

or a connected project for a period or periods aggregating more than six months

within any twelve months period.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 or display or the occasional 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 occasional delivery;c. the maintenance of a

stock of goods or merchandise belonging to the enterprises 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;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 6, where a person other than an agent of an

independent status to whom paragraph 6 applies is acting in a Contracting State

on behalf of an enterprise of the other Contracting State, that enterprise shall

be deemed to have a permanent establishment in the first-mentioned Contracting

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

enterprise, if such person-a. has and habitually

exercises in that State, an authority to conclude contracts in the name of 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; orb. has no such

authority, but nevertheless maintains habitually in the first-mentioned

Contracting State a stock of goods or merchandise from which he or she

regularly delivers goods or merchandise on behalf of the enterprise.1.2.3.4.5.6. 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 or she will not be considered an

agent of an independent status within the meaning of this paragraph.7. 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 be also

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, boats and aircrafts 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 5 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.5. Where the ownership

of shares or other rights in a company or legal person entitles the owner to

the enjoyment of immovable property situated in a Contracting State and held by

that company or legal person, income derived by the owner from the direct use,

letting or use in any other form of his or her right of enjoyment may be taxed

in that State. The provisions of this paragraph shall apply notwithstanding the

provisions of Article 7 or 15.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 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 pro fits 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 determination of

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

expenses which are incurred for the purposes of the business of 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 laws of that State. However, no such deduction shall be

allowed in respect of amounts, if any, paid (otherwise than towards

reimbursement of actual expenses) by the permanent establishment to the head

office of the enterprise or any of its other offices, by way of royalties, fees

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

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

except in the case of a banking enterprise, by way of interest on moneys lent

to. the permanent establishment. Likewise, no account shall be taken, in the

determination of the profits of a permanent establishment, for amounts charged

(otherwise than towards reimbursement of actual expenses), by the permanent

establishment to the head office of the enterprise or any of its other offices,

by way of royalties, fees or other similar payments in return for the use of

patents or other rights, or by way of commission for specific services

performed or for management, or, except in the case of a banking enterprise by

way of interest on moneys lent to the head office of the enterprise or any of

its other offices.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 this 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 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

8SHIPPING

AND AIR TRANSPORT1. Profits from the

operation or charter of ships or aircraft in international traffic and the

rental of containers and related equipment which is incidental to the operation

of ships or aircraft in international traffic shall be taxable only in the

Contracting State in which the place of effective management of the enterprise

is situated.2. If the place of

effective management of a shipping enterprise is aboard a ship or boat, then it

shall be deemed to be situated in the Contracting State in which the home

harbour of the ship or boat is situated, or, if there is no such home harbour,

in the Contracting State of which the operator of the ship or boat is resident.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.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

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 an

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

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.1.2.3. The term

"dividends" as used in this article means income from shares of all

kinds 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 15, as the case may be, shall apply.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 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. Interest arising in a

Contracting State shall be exempt from tax in that State provided it is derived

and beneficially owned by:a. the Government, a political

sub-division or a local authority of the other Contracting State; orb. such agency or

instrumentality of the Government of the other Contracting State as may be

agreed in writing between the competent authorities of both the 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 profit, 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 2 and 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 a case the provisions of Article

7 or 15 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 or she 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 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

12ROYALTIES1. Royalties 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 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, the tax so charged shall not exceed 10 per cent. of the

gross amount of the royalties.3. 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 cinematograph films and

films or tapes used for radio or television broadcasting, any patent, trade

mark, design or model, computer programme, plan, secret formula or process, or

for the use of or the right to use industrial, commercial or scientific

equipment involving a transfer of know-how or for information concerning

industrial, commercial or scientific experience.4. The provisions of

paragraphs 1 2 and 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 of property

in respect of which the royalties are paid is effectively connected with such

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

or Article 15, as the case may be, shall apply.5. Royalties 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, whether he or she 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 was

incurred, and such royalties are borne by such permanent establishment or fixed

base, then such royalties 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 royalties 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, or from the

alienation of shares in a company the assets of which consist principally of

such property, may also 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 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 also be taxed in that other 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 or similar rights being shares in a company, the assets of

which consist principally of immovable property situated in a Contracting

State, may also be taxed in that State. Gains from the alienation of an

interest in a partnership, trust or estate, the property of which consists

principally of immovable property situated in a Contracting State, may also be

taxed in that State.5. Gains derived by a

resident of a Contracting State from the sale, exchange or other disposition,

directly or indirectly, of shares other than those mentioned in paragraph 4, or

similar rights in a company which is a resident of the other Contracting State

may also be taxed in that other State.6. Gains from the

alienation of any property other than that referred to hereinabove, shall be

taxable only in the Contracting State of which the alienator is a resident.Article

14FEES

FOR TECHNICAL SERVICES1. Fees for technical

services arising in a Contracting State which are derived by a resident of the

other Contracting State may be taxed in that other State.2. However, such 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 fees for the technical services, the tax so charged

shall not exceed 10 per cent. of the gross amount of such fees.3. The term "fees

for technical services" as used in this article means payment of any kind

to any person, other than to an employee of the person making the payments, in

consideration for any services of a technical, managerial or consultancy

nature.4. The provisions of

paragraphs 1 and 4 shall not apply if the beneficial owner of the fees for

technical services, being a resident of a Contracting State carries on business

in the other Contracting State in which the fees for technical services arise

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

State independent personal services, and the fees for the technical services

are effectively connected with such permanent establishment or such services.

In such case, the provisions of Article 7 or 15, as the case may be, shall

apply.5. 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 statutory body

thereof, or a resident of that State. Where, however, the person paying the

fees for technical services, whether he is a resident of a Contracting State or

not, has in a Contracting State a permanent establishment in connection with

which the obligation to pay the fees for technical services was incurred, and

such fees for technical services are borne by that permanent establishment,

then such fees for technical services shall be deemed to arise in the

Contracting State in which the permanent establishment is situated.6. Where, by reason of a

special relationship between the payer and the recipient or between both of

them and some other person, the amount of the fees paid for technical services,

exceeds for whatever reason, 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 law of each Contracting State due regard being had to the other provisions

of this Convention.Article

15INDEPENDENT

PERSONAL SERVICES1. Income derived by an

individual who is 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. Such income may also be taxed in the other Contracting State if:-a. the individual has a

fixed base regularly available to him or her in that other State for the

purpose of performing his or her activities, but only so much thereof as is

attributable to that fixed base; orb. the individual is

present in that other State for a period or periods exceeding in the aggregate

183 days within any period of 12 months, but only so much thereof as is

attributable to services performed in that State.1.2. The term

"professional services" includes especially independent scientific,

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

activities of medical practitioners, lawyers, engineers, architects, dentists

and accountants.Article

16DEPENDENT

PERSONAL SERVICES1. Subject to the

provisions of Articles 17, 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 there from 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 within any period of 12 months 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 by a resident of a

Contracting State 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 place of effective management of the enterprise is situated.Article

17DIRECTORS'

FEESDirectors'

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

his or her 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 State.Article

18ARTISTES

AND SPORTSPERSONS1. Notwithstanding the

provisions of Articles 15 and 16, 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 or her 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

or her capacity as such accrues not to the artiste or sportsperson but to another

person, that income may, notwithstanding the provisions of Articles 7, 15 and

16 be taxed in the Contracting State in which the activities of the artiste or

sportsperson are exercised.3. Notwithstanding the

provisions of paragraphs 1 and 2, income derived by an artiste or sportsperson

from his or her personal activities as such shall be exempt from tax in the

Contracting State in which these activities are exercised if the activities are

exercised within the framework of a visit which is substantially supported by

the other Contracting State, a political sub-division, a local authority or a

public institution thereof.Article

19PENSIONS

AND ANNUITIES1. Subject to the

provisions of paragraph 2 of article 20, pensions and other similar

remuneration for past employment or any annuity arising in a Contracting State

and paid to a resident of the other Contracting State, shall be taxable only in

the first mentioned State.2. 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

20GOVERNMENT

SERVICE1.a. Remuneration, other

than 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 other State and the individual is a resident of

that State whoi.

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. 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;3. The provisions of

Articles 16, 17 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

21PROFESSORS,

TEACHERS AND STUDENTS1. Remuneration received

for educational or scientific research by an individual who is or was

immediately before visiting a Contracting State a resident of the other

Contracting State and who is present in the first-mentioned State for the

purpose of scientific research or for teaching at an educational institution

shall be exempt from tax in the first-mentioned State. This exemption shall be

granted for a period that shall not exceed two years from the date on which the

teacher or researcher first entered the first-mentioned State for the purposes

of engaging in scientific research or for teaching. This article shall not

apply to income from research if such research is undertaken not in the public

interest but primarily for the private benefit of a specific person or persons.2.a. Payments which a

student or a business apprentice who is or was immediately before visiting a

Contracting State a resident of the other Contracting State and who is present

in the first-mentioned State solely for the purpose of his education or

training receives for the purpose of his maintenance, education or training

shall not be taxed in that State, provided that such payments arise from

sources outside that State.b. Payments which a

student or business apprentice receives as remuneration from employment in the

first-mentioned State shall be exempted from ' tax in the first-mentioned

State. This benefit 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 benefit of this

provision for more than three consecutive years from the date of his or her

first arrival in the first mentioned Contracting State.Article

22OTHER

INCOMEItems

of income not dealt with in the foregoing articles of this Convention and

derived from sources within a Contracting State shall be taxable only in that

State.Article

23ELIMINATION

OF DOUBLE TAXATION1.

In

Namibia, double taxation shall be eliminated as follows:Where

a resident of Namibia derives income or capital gains from India, the amount of

tax on that income or gains payable whether directly or by deduction, in India

in accordance with the provisions of this Convention, may be credited against

the Namibian tax imposed on that resident. The amount of credit, however, shall

not exceed the amount of the Namibian tax on that income or gains computed in

accordance with the taxation laws and regulations of Namibia.1.2. In India, double

taxation shall be eliminated as follows:-Where

a resident of India derives income or capital gains from Namibia, which in

accordance with the provisions of this Convention may be taxed in Namibia, then

India shall allow as a deduction from the tax on the income of that resident an

amount equal to the tax on income or capital gains paid in Namibia whether

directly or by deduction.Article

24LIMITATION

OF BENEFITS1. If, in accordance

with the provisions of this Convention, the right of India to tax income is

limited and according to the Namibian tax laws the income is regarded as income

from foreign sources and, therefore, exempted from Namibian tax, India may tax

such income as if this Convention did not exist.2. If, in accordance

with the provisions of this Convention, the right of Namibia to tax income from

Namibian sources or deemed to be from Namibian sources is limited and if such

income is in accordance with the Indian tax laws not taxed in India, Namibia

may tax such income as if this Convention did not exist.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 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 of 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. Except where the

provisions of paragraph 1 of Article 9, paragraph 7 of Article 11, paragraph 6

of Article 12, or paragraph 6 of Article 14 apply, interest, royalties, fees

for technical services 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.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 more burdensome than the taxation

and connected requirements to which other similar enterprises of the

first-mentioned State are or may be subjected.5. Nothing in this

Article shall be construed as obliging a Contracting State to grant to

residents of the other Contracting State any personal allowances, reliefs and

reductions for taxation purposes on account of civil status or family

responsibilities which it grants to its own residents.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 or her in taxation not in accordance with the provisions of

this Convention, he or she may, irrespective of the remedies provided by the

domestic laws of those States, present his or her case to the competent

authority of the Contracting State of which he or she is a resident or, if his

or her case comes under Paragraph 1 of Article 25, to that of the Contracting

State of which he or she 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 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 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.Article

27EXCHANGE

OF INFORMATION1. The competent

authorities of the Contracting States shall exchange such information

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

Convention or of the domestic laws of the Contracting States 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 if 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 and administrative practice

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

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.Article

28DIPLOMATIC

AGENTS AND CONSULAR OFFICERSNothing

in this Convention, shall affect any fiscal privileges accorded to members of

diplomatic or permanent missions or consular posts under the general rules of

international law or under the provisions of special agreements.Article

29ENTRY

INTO FORCEEach

of the Contracting States shall notify to the other through diplomatic

channels, the completion of the procedures required by its laws for the

bringing into force of this Convention. This Convention shall enter into force

on the date of the, later of these notifications and shall thereupon have

effecta. in Namibiai.

in

respect of taxes withheld at source, for amounts paid or created on or after

the first day of March in the calendar year next following that in which this

Convention enters into force; andii.

in

respect of other taxes, for any year of assessment beginning on or after the

first day of March in the calendar year next following that in which the

Convention enters into force.a.b. in India:i.

in

respect of taxes withheld at source, for amounts paid or credited on or after

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

Convention enters into force; andii.

in

respect of other taxes, for any fiscal year beginning on or after the first day

of April in the calendar year next following that in which the Convention

enters into force;Article

30TERMINATION1. This Convention shall

remain in force 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, a y

calendar year beginning 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 Namibia:i.

in

respect of taxes withheld at source, for amounts paid or credited on or after

the first day of March in the calendar year next following that in which the

notice is given; andii.

in

respect of other taxes, for any year of assessment beginning on or after the

first day of March in the calendar year next following that in which the notice

is given;a.b. in India:i.

in

respect of taxes withheld at source, for amounts paid or credited on or after

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

notice is given; andii.

in

respect of other taxes, for any fiscal year beginning on or after the first day

of April in the calendar year next following that in which the notice is given;In

witness whereof

the undersigned, duly authorised thereto, have signed this Convention.Done in duplicate at New

Delhi, this 15th day of February 1997, in the English and Hindi languages, both

the texts being equally authentic. In case of any divergence in interpretation,

the English text shall prevail.For

the Government of theRepublic

of Namibia(Sd.)

Helmut Angula,Minister

of Agriculture,and

Rural Development.For

the Government of theRepublic

of India,(Sd.)

Inder Kumar Gujral,Water

Minister of External Affairs.